“Who’s the fool? The fool that leads or the fool that follows?”

obi wan

 

Obi Wan Kenobi:

"Who's the fool? The fool that leads or the fool that follows?"

 

 

 

 

 

In our humble opinion, the property industry has always been focused on the ‘industry’ part and not so much on the ‘property’ part. This is the greatest moment in the history of property if your dream is to distribute as much information as possible to as many people as possible, to learn as much as you can about property, or if your goal is to become heard as an expert on property. There’s never been a time like this before. So if your focus and passion is on property, it’s great.

However, if your focus is on the “industry” part and the big house, flash car, building a huge mailing list to sell to, running a big networking/sales/seminar event to front sales and affiliate commissions … it’s horrible. The shift that is happening right now is that the people who insist on keeping the world as it was are going to get more and more frustrated until they lose their business. Their business is based on people paying them to find out how to invest in property because the “guru” claims to know the “secret” to massive wealth. That worked in the old days when information wasn’t freely available and there was an element of only the wealthy and privileged being involved in property. It accelerated further with the advent of the BTL mortgage and easier credit, so property was opened up to pretty much anyone.

However, all this “secret” information is now freely available on-line, so why should people pay for it anymore?

As a result, there are promoters who probably won’t be around this time next year. They are very high-profile and visible and are only too keen to take your money upfront so they can tell you their secrets. You have to pay them each time you are “up-sold” to a new product or service. However, thanks to the wealth of information on the internet and the ease of accessing it, there is almost nothing that is a true secret in property investing. There are just a lot of naive people who think there are secrets worth paying large sums to learn. Education is important – that will never change. However, you must question how any business can be sustainable if it depends on secrets and someone else is selling the secret. Sooner or later the secret is filtered into the public domain and the secret become de-valued as a result. Taking it a stage further, with the change in lending criteria, and mortgage products, many of these “secrets” are no longer relevant or workable in the rapidly changing conditions we are experiencing. That is why these businesses are doomed to failure as people start adopting and adapting to Web 2/3 or 4 mentality.

Conversely, people who want to invent a whole new set of rules, a new paradigm, can’t believe their good fortune and how lucky they are that the people in the “industry” aren’t noticing an opportunity…

The American marketeer, Seth Godin defines a "tribe" as a group of people sharing a common culture, a goal, a mission, probably a leader. There are tribes of people – like the ones who actively invest in property, go to networking events and contribute value to others on-line – who are connected because they want to remake the property industry. The important distinction here is that, as previously stated, property clubs, gurus, seminars etc. used to be in the business of charging exorbitant fees for education – nothing was ever given away for free other than a “taster” session to up-sell to a more expensive product. Now, the property industry needs to realign and be in the business of giving massive value, finding and connecting and leading groups of people who want to follow a strategy or philosophy, and connect with other people, whose values they share, who want to do the same…

On-line information is in the process of surpassing seminars and events, and once it starts to happen it’s going to happen faster and faster. The more interesting thing to consider is who is going to control the information. If there is an infinite amount of information available – and it could be argued that as soon as the amount of information available exceeds the amount of time you have in your life, that’s infinite – somebody will have the leverage-able spot of deciding what should be read next. And it’s unclear whether someone will charge to tell me that or will pay to tell me that! It’s still up for grabs in every one of these "herds" where people define who they are by who they “follow” – whether it be a musician, a band, a fashion, a newspaper, a celebrity, a property guru etc. Who are the taste-makers and how do these ideas spread?

The analogy I like to give is if you’re an author and Richard and Judy call, you don’t say, “How much are you going to pay me to go on your show and give away all the ideas in my book?” In fact, if you could you would pay to be on Richard and Judy. For a really long time the music industry was also in two minds: On the one hand, they would pay money to be on Clear Channel or MTV; on the other hand, they would charge you money to hear their music in concert or out of your stereo. The internet has decided the outcome for them.

When it comes to the property arena, the outcome is in the process of being decided – hence the massive change taking place in many areas and processes of our business.

Consider an alternative view: Just by giving consistent and massive value and “contribution currency”, will a tribe of followers be built who all share the same goal and each of whom will further support the cause and bring further success to all of through the momentum of the group? There is indeed strength in numbers. However, how is it that some wildebeest, on a great migration, take a completely different path? Are they forging ahead and embracing change, and thereby ensuring their survival? Following the “herd” in property won’t achieve you anything, other than being “sold to”.

Don’t get me wrong – business is business – and I’m not trying to take the bread out of anyone’s mouth, however, who’s the fool? … the fool that leads or the fool that follows?

Darwin once said “It is not the strongest of the species that survives, nor the most intelligent, but the one most responsive to change”. This is no doubt true in business.

So perhaps the new cult in property should be to “give” rather than to “take”? It can’t
be “monetarised” on a spread-sheet, but we believe it is the businesses (and that includes Landlords) who adopt this attitude and philosophy who will be the survivors and the winners in the years to come.

So, if you’re in property, start by seeing where you can give value and add value at every opportunity, whether that be to tenants, clients, the properties themselves, property forums, the list goes on.

An simple example from our own business: A tenant contacted me recently to let me know that the fridge had broken and that they had lost their week’s shopping as a result. I sent an engineer out to fix it immediately. I then sent the tenant some M & S gift vouchers to replace the food they had lost. This hopefully made my tenant feel valued and that I was a decent Landlord. They may think twice about moving on as a result. In these challenging and highly competitive market conditions, the outlay of a few £’s seems a small price to maintain a good tenant’s satisfaction. A void period on that property would cost me £800.00 not to mention a possible decrease in the rent I was achieving.

The greedy days of property are, most likely, over. We’re in a new era of sharing and reciprocity. We can all do our bit to make the property industry a better and more ethical place to grow.

P.S. Top Tip: If you have a good tenant, our advice, in the current sensitive market conditions, is not to think about a rent increase. Let sleeping dogs lie. Tenants may be nervous of losing their job in the current uncertain economic climate, so a rent increase might be enough to tip them over the edge to hand in their notice. Our advice is to keep the status quo. If you lose a tenant in the current market conditions, you may end up achieving less rent than the previous tenant, not to mention the possibility of a void period. Good tenants are like gold dust so hang on to them and keep them sweet!



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