Blackjack is a classic gambling game pitting card players
versus a dealer. The goal is to have the
card players’ hands total 21 or as close to 21 as possible, while not going
over 21. As the game unfolds, if the
card holders’ hands stay under 22, they will be compared to the dealer’s hand
(if he stays under 22); whoever has the higher total wins the hand. It can be both exhilarating and frustrating!
The main conundrum for the card players is whether to
request an additional card (“hit”) to pad their point totals. The upside is that the closer the players get
to 21, the stronger their card hands become and the more likely they are to
win. The downside is that if any of the
players get over 21, they automatically “bust” (lose) and their bet for that card
hand is immediately forfeited.
At casinos, it is not uncommon to hear players loudly
talking about their decisions on hitting on their card hands:
“I knew I shouldn’t have hit. I would have won! Ugh!!”
“Yes! I got the
King I needed to hit 21. Great hit!”
“No hit for me.
Dealer is going to bust!!!”
Both hitting and staying put (taking no cards) can be the
right strategy depending on how the cards land.
But if a wrong decision is ultimately made, there is no way players can
change their minds afterwards. Once
players take a card (or don’t and “stay”), their decision is cast and they need
to wait to see what happens. There are
no “do-overs”.
As a Charlotte property
manager, this reminded me of giving lease extension offers to existing
tenants.
From a landlord perspective, landlords want to charge the
highest rent possible and have the tenant re-sign their lease at that rate. From the tenant perspective, the tenant wants
to stay and pay the least rent possible or move to another rental unit that
serves their needs better (this could mean lower price, better or different location,
different size unit, etc.). Both sides
have some disparate interests that need to be rectified before a new lease
extension can be signed.
But an initial offer to extend the lease (tendered usually
by the landlord) must be made. And the question
is what price should be asked for. There
are usually no “do-overs”. The price offered
is going to be what the tenant ultimately makes a decision off of. Whatever it is, it needs to be strong and not
wishy-washy. Wishy-washy can create
problems:
Landlord: Good morning, Mr. Tenant! Your lease is up at the end of next month and
I wanted to see if you were looking to sign for another year.
Tenant: I was thinking about it. What are the terms?
Landlord: Well, I was going to raise the rent $200. How does that sound?
Tenant: Not that good.
I thought I was overpaying now.
Landlord: How about no rent increase. Will that work?
Tenant: I’m not sure.
I need to talk to my wife and think about it. We’re going in the right direction, though!
Landlord: How about $200 less than you are paying now. Would that work?
Tenant: Now you’re talking! That’s more in line with what I think this
dump is worth. I’ll get back to you.
Landlord: How about $300 less?
This can create a slippery slide.
Much like Blackjack, landlords need to look at their
situation and decide how much risk they want to take on with potentially losing
the tenant they already have in place. Then
they need to make the offer (hit) and wait to see what decision the tenant
makes. Sometimes, the offer doesn’t matter
because the tenant was going to vacate regardless. But often, the price is the motivating factor
on whether the tenant decides to stay.
Smart landlords will think hard about how much they will
raise the rent (hit) or whether they will offer it at the same rate
(stay). There is no middle ground- you
gotta hit or don’t hit! They know that once
that card is played, there is little chance to do it over and take it back.
Happy Landlording!
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