Reputation Management: The Only Time It’s Better to Lose Money…
One of the lessons I learned early on in my real estate investing career was that the circle of industry professionals is smaller than you might think. One of the worst things you can do in this business is neglect to take care of your clients, vendors, partners, etc. and develop a bad reputation as a result.
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Whether you are a landlord, a wholesaler, a house flipper, or hard money lender, etc., you are inevitably doing business with some group or groupings of customers and other real estate professionals in your everyday investing activities. These people form your team as well as your customer base and are critical to your success (or lack of success). Having been in this business full-time now for over 8 years, I’ve seen first-hand how easy it is to develop a reputation for yourself (for the better or for the worse).
One of the common threads that I’ve seen in successful real estate businesses over the years is the positive reputation that these businesses have managed to maintain. Whether this was from strong tenant relations, focused customer service, quality workmanship, or even just paying contractors in a timely manner – the real estate businesses that seem to have the most success in the marketplace are those businesses that strive to take care of the people they work with and serve.
Key Principle: Reputation over Profit
One key principle that I’ve learned to employ in my business is that sometimes it’s better to spend money or even lose money rather than tarnish your reputation or the reputation of your company. Honestly, there is not a week that goes by that I don’t have to make a decision along these lines.
Whether I’m covering rent for an investor who lost a tenant, or paying to fix the A/C on a house I sold months ago – the money spent is worth it if I am building a solid reputation for my business. Ultimately, having a strong reputation as a company that can be trusted is what’s going to keep you in business.
I’ve seen many companies pop up over the years, sell a few properties and then disappear into oblivion when faced with challenges and expenses they were not prepared to face. Spending time and money to keep your customers satisfied with your product … especially in the early years will go miles towards building a business that will last.