Only Shirts, No Pants, No Coats
How to adjust investing to the new reality
We all now have our experiences with 15 months of living with a pandemic. I have been contemplating what some of the less obvious impacts will be going forward.
One thing the media kept telling us is the massive impact of the lockdowns on many aspects of the retail and hospitality industry.
That makes sense as we don’t go out shopping or dining when all stores and shops are closed.
On the other hand, imagine how the business would have been for a particular part of the retail industry if it had been magically exempt from closing and available to shoppers.
I am talking about the apparel industry and specifically business apparel.
When we were all lock-down at home, would anybody have gone out to shop for business attire? I think not.
CNN reported that on Wednesday, July 8th, 2020, Brooks Brothers, the 202-year-old menswear retailer that has dressed 40 US presidents and is synonymous with the classic Wall Street banker look, filed for bankruptcy as demand for suits plummeted amid the pandemic.
CNN quotes Jessica Cadmus, a New York-based stylist whose clients mostly work in the finance industry saying: “The reality is that workwear trends have been shifting for a while now and sadly the pandemic was the final nail in the coffin.”
Her male clients, she said, are looking for new shirts but not trousers. “They are not asking about sports coats, suits, or shoes. It’s just shirts,”. Women want statement necklaces, earrings, and broaches instead of suits and dresses for a more put-together look for video calls.”
What does all this mean for us as passive income and cash-flow-seeking real estate investors?
I can tell you that my view on a certain type of house has changed a lot based on this change in work circumstances.
When I was still an officer in the military, they assigned us to an Air Force Base in New Mexico and we bought a house off-base in the community.
I still recall the frustration that all the houses we liked had 3–4 tiny bedrooms. We searched and searched — it felt like 100 houses and couldn’t find even one that has some decent size bedrooms. Ultimately, we found a great builder, drew up our own plans, and had a house built.
Fast forward 20+ years and I suddenly, considering the changes triggered by the pandemic, have become a fan of houses with a few smaller bedrooms.
Here is the deal: As an investor, the ideal house was always a 3 bedroom 2 bathroom house with a little garden, a garage in a pleasant neighborhood.
Working with many colleagues during the pandemic, mainly on video calls, I realized, and I am sure you have seen many examples as well, of people in bedroom corners, kitchen nooks converted closets, and even garages.
One of the most thought-after features in the last 15 months has been the “artificial background image” or a green screen to attach to your chair.
From now on I will look more for 4 bedrooms 2 bathroom houses and accept even if 2 of the bedrooms are rather small.
With that setup, you can have a couple with 1–2 kids and they have the option to use 1 or 2 of the small bedrooms as offices and keep the master and the next largest bedroom for themselves and the kids.
Each adult can work from home during the day in their own room — wearing these nice shirts, no coats, and casual pants.
Now the only other thing I need to figure out and suggest for all other passive income residential real estate investors who work with flippers or turnkey providers: Let’s convince the folks who renovate the properties we purchase to put in tons of power outlets and great lighting in all bedrooms so we can plug in all the office gadgets we need in case we use a bedroom as our home office.
That’s what I am looking to do differently when investing in 2021.
For 2022, maybe I can offer Starlink internet to all my tenants so they really can go all out when creating, working. and innovating from home.