The dramatic socioeconomic changes taking place in our country and for that matter the world beg for a re-examination of the business model for income properties. Because of the large number of income property types and types within types, the following re-examination will focus on the three core types of income property: Residential, office, and retail. These income property types are where people live, work and shop, and therefore represent the basis for any changes that might happen in the current income property business model.

What is a business model? The phrase describes all of the critical aspects of a for-profit undertaking. It would include the enterprise’s purpose, philosophy, products and/or services, strategies, infrastructure, organizational structure, sales practices, and operational procedures.

There are many factors that decide the make-up of a business model. However, there is one factor that dominates all the others: Customer/client and the relationship between the customer/client and the enterprise.

More businesses have failed because the enterprise didn’t know who their customer/client was. The customer/client was a mismatch to the business model. The enterprise believed it could dictate the customer/client needs (build it and they’ll buy it). The customer/client changed, and the business model didn’t.

All the same reasons apply to income property. Replace the word enterprise with the phrase income property, and replace the word customer with the word lessee. The result is the same overarching affect customers have on business enterprises, lessees have on income property. That being the case, the rationale for whether to continue the current income property business model can only be determined by first answering the following question: Have the lessees for the three core income property types changed, or are they the same?

NetGain that believes the needs and the habits of lessees occupying the three core income property types have changed. The basis for this belief is predicated on two significant socioeconomic changes: The technological revolution and the cost of transportation. These two events have promulgated the most significant changes in the use of income property since America went from an agrarian society to a manufacturing society.

Following is a list of changes from the lessees/clients of the three core income property types.

Work Habits

A recent survey by The Dieringer Research Group as part of Dieringer’s 2005 American Interactive Consumer Survey found that out of 135.4 million American workers:

• 45.1 million worked from home.


• 24.3 million people worked at client’s or customer’s place of business.


• 20.6 million in their car.


• 16.3 million while on vacation


• 15.1 million at a park or outdoor location.


• 7.8 million while on a train or airplane.

In addition the U. S. Bureau of Census now estimates the number of self employed persons working at home is over 20 million people.

Driving Habits

The Federal Highway Administration said Americans are traveling tens of billions of miles fewer this year (2008) than they did last year, the biggest drop ever. In April, Americans drove 245.9 billion miles, 1.8 percent less than a year ago.

“April marks the sixth month in a row that we have seen a decline in vehicle miles traveled across the country,” said Jim Ray, the FHA’s acting administrator. “We’re seeing Americans drive less across the board.”

The agency has been collecting data since 1942. Ray says vehicle miles traveled have risen steadily from one year to the next. Driving did taper off during the energy crisis of the 1970s and early 1980s when gas prices were high. At that time, drivers cut back by 500 million miles. But highway officials liken that to a plateau — and the current situation to a cliff.

“It is the steepest decline in vehicle miles traveled ever recorded,” Ray says. “What we’re estimating now for the 2007-2008 figures are 30 billion miles. So we’re seeing a difference of 60-fold.”

And that’s just in the first six months.

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