Real Estate Investors Must Create Value

I have been writing a lot lately about the business side of being a landlord and real estate investor.  I recently discussed working on not in your business for example.  While that is an important lesson, I think another is that we as real estate investors must create value.  Not just value in terms of properties, but value for everyone we come in contact with.

Landlording and real estate investing is not just about real estate, it is about running a business.  And as any business owner will tell you, running a business is about creating value.  By creating value, we businesspeople persuade other people to work with us or give us some of their hard earned income.  We real estate investors cannot force tenants to live in our properties, nor can we force people to sell us property or work on out properties.  We have to earn it.

We earn it by creating value.

How can you create value for everyone you come into contact with and thus run a leaner and more profitable business?  Here are some ideas.

Creating Value

Make It Easy – Nobody, and I mean nobody, wants a hassle.  Do not be in the business of creating hassles.  Make it easy for a potential tenant to find you.  Make it easy for property sellers to work with you.  Make it easy for contractors to get paid.  Make it easy for your banker to get your financial information.  Making it easy creates value for other people.  Do it.

Be A Person Of Your Word – You would not think that I would not have to say this but there are a lot of people in this world, and in real estate investing, who do not keep their word.  On more than one occasion I have been told I have a deal only to see it slip away to someone else.  The numbers suddenly change, the terms suddenly change, tenants make up stories and on and on.  The thing is, you cannot be a person of your word to me only once.  After that, you have failed to create value for me and I am no longer going to waste time on you.  Do not be that person, keep your word.

Offer Solutions – A major part of the business of real estate investing is offering solutions.  How?  Offer a solution to the property owner that feels upside down.   Offer a solution to the tenant who is having roommate issues.  Being creative and putting puzzle pieces together to create workable solutions to almost any problem creates a lot of value for most people.

Make It So – This is where a lot of people fail.  They can talk the talk, but when it comes to implementation, they fail.  Not being able to implement, be it property repairs, new management systems or just closing a deal, fails to bring value to the table.  No one wants to work with someone who cannot get it done.

“I want to do this again.”

If you do the above you will be well on your way towards crating value for people and being successful. Creating value makes people say “I want to do that again.” which is honestly the best thing any business owner can hear.  Think about it.  You want most of your tenants to tell you that they want to renew their lease.  You want your banker to make another loan to you.  You want that contractor to return your calls and take on more of your jobs.  You get people wanting to do it again by creating value and you create value, in part, by following the tips I outlined above.

Author’s Note – This post was inspired by my friend and fellow real estate investor Terry Kerr.  Terry owns Mid-South Home Buyers and recently spoke at the Memphis Investors Group.  Terry has been fabulously successful by adding value for everyone he meets.  Check him out discussing turnkey investing on Episode 5 of the SmarterLandlording Podcast.