Beter businessmodelImage this! As a property investor you are no longer responsible for items that only last a few years; like the kitchen, the bathroom and the boiler. And as a tenant you get complete control over them. Granted, not everyone sees that as an advantage, especially in short rent situations. Even more important; that’s impossible yet under the current regulations in real estate law and regulations. In the last 5 years, Japan and Finland prove how urgent this change actually is and how great solutions work out for everyone!

Yes, there are great social, ecological and economic reasons to make that possible, therefore I have initiated an research project. The result will be better business models that will be great for both property owners and end users! And in addition to that for the government in its social responsibility too. But … I do need your help on that. To make maximum use of the existing possibilities within the different legal real estate laws in countries in Europe and by exploring new possibilities we additionally need. In this blog you can read also what your influence or contribution can be.

What’s the current problem?

If we want to establish additional and up-to-date relationships in ownership between a property owner and the daily user, there is legal and financial work to do. Because the current construction law and regulations are not logical in the way legal ownership limits the choices investors, owners, users and suppliers have. I am exploring how we can broaden these relationships in construction and real estate and come up with better business models for all concerned.

What will the result be?

For investors (often called owners): You only need to invest in those parts of the building that really last a long time. That is the base building, consisting of a core and a shell, and definitely not the kitchen and bathroom. This separation frees you from all the patronizing rules about the fit-out, like how high the doors should be and demanding room for a wheelchair. If you like you can even lease the shell, which makes the supplier responsible for its management and maintenance. In short, you get more return on invested capital with less risk. That is a far better business model than you have now. You won’t have objections to that!

For users: You finally have complete freedom to arrange your total fit-out yourself even if you are not the owner of the house or business premises as a whole. You no longer have to own (part of) the base building to make your own decisions. So when you want a different design, bathroom, kitchen or fit-out related systems for heat, light and ventilation, you make it happen on your own terms. For example with an additional interesting rent or lease from your supplier(s) to you.

For suppliers: Finally you can develop and deliver complete fit-outs directly to customers. In such a business model you arrange the financing (purchase or lease) together and make your own arrangements for management and maintenance and for relocation when your client wants to move. Creating direct decisions by your client to you based on your actual performance.

Together we are strong

I am sure we can achieve these results together. This may be partly due to within the current legislation, but there is much more if we adjust parts of ot. And many of those alternatives already exist in the countries around us! How exactly this research goos off can be read in my research proposal. You can downloaded that free of charge, and even help by applying the results later.

Avoid the ‘split incentive’

The separation of base building and fit-out underlies all new business models, and is a sequel to the many studies example from MIT and Ball State University on this and the practical experiences in Japan and Finland. The main interests of the user are connected to the fit-out. The interests of the owner are connected to the base building. This clear separation of responsibilities directly solves the problem of the split incentive. Or rather the new business models prevent this problem. With the split incentive the expenses of new investments mostly benefit other parties than the investor himself, blocking any serious progress. That is not the case in the new situation, where not the owner of the building but the user himself invests in a new boiler and directly profits through a reduced energy bill. With or without some financial help from the supplier or energy company.

Take the next step and share your experiences

Do you want to take a next step? Come to the FREE* Masterclass. We will work with practical tools to instantly implement the actions of my ebook in your organizational, fiscal or financial projects and organization.

Join the conversation

Do you know how to build that new way and what you need? What benefits for use do you see, which one is the most important? Share it in the comments below.

To your health and wellbeing,

Remko Zuidema