People, Places, and Profit

I’m looking for an honest conversation about the tension between making a financially profitable decision and making a decision you feel really good about.

We recently turned down a potential JV partner. The financials worked, but the values didn’t. When I mentioned this to my daughter she replied bluntly: “Of course—all rich people have no morals.” Harsh? Certainly. But also revealing. Ironically, she says she rarely mentions in public she works in banking!

Years ago, I sold my little house to a landlord for £2,000 more than a young couple buying their first home could afford. They really wanted it. I had financial stability. I chose profit over people. I feel bad about it to this day.

In our mostly secular society, many of us, including me, create our own moral frameworks— often fuzzy around the edges. And in a brutal property market, even good intentions can get bent out of shape.

Recently, supported accommodation HMOs for homeless or at-risk tenants has become an exponentially popular portfolio strategy. Now, notably, the new HMO ‘studio’ model— ‘all-inclusive’ with en-suites and kitchenettes—is the next-level profitability many landlord/developers are working towards. It accesses higher rent per room, and with a good lease attached they flip well too. Each room must meet at least 14m² space standards, although some housing providers do insist on more space, and if that includes the en suite maybe seems a bit slim. Although design counts for a lot, I have seen a kitchenette work-top double as a bedside table.

It’s better than rough sleeping certainly — but is it truly restorative? Does it build dignity, stability, confidence? ‘Short-term accommodation’ often becomes longer-term by default. Cutting down communal space also decreases spaces for friendship and community.

The other quandary for the developer is the flexible big Victorian town houses that break down nicely into HMOs, don’t quite fulfil what ideally is sufficient space for the all-inclusive model, without lowering rather than increasing overall profit.

Andy and I come from a Care background. That’s still our lens. We're not just providing rooms—we’re trying to change lives.

But we guess, like us, many other landlords are trying to make a living AND do what they feel good about. What do you think is a reasonable approach to this quandary and how do you tackle it?