In any business, there are certain characteristics that stand out with successful people. One of the most important ones in my experience, that is often not mentioned, is responsiveness. This is applicable whether it is you as the investor, or someone on your real estate team, whether property manager, attorney, etc.
In this article, I will talk about:
- What is Responsiveness
- Why is it critical that you are responsive
- Why is responsiveness important for your real estate team?
What is Responsiveness?
According to Webster’s Dictionary,
Responsiveness: 1. reacting in a desired or positive way 2. quick to react or respond
Both of these definitions can be applied in the sense of responding to peoples’ needs, be they tenants, agents, HOA, etc., whether positively or negatively, in a timely manner, and following through if something is promised.
Why is it critical that you are responsive?
The simplest possible answer to this is that real estate investing is a business, and you don’t work in a vacuum. There are other people involved, whether they be your tenants, a real estate agent working for you, a mortgage company, etc., and their ability to be successful in business depends on you and others fulfilling obligations that you make to them.
Responsiveness is really like completing an implied contract. Sometimes this is actually formalized in a agreement, as when you have a mortgage that you agree to pay on a certain date every month. If you do not follow through, there are defined penalties.
Other times, the call for responsiveness is in a more tenuous agreement, like when you tell someone you will do something for them. There is a tacit agreement that you will provide something that they are asking for as it relates to your business. Of course, this could be in your personal life as well, but that probably goes without saying. Some places where this comes into play are with a realtor who may be helping you find or sell real estate, a tenant who calls with a problem, or with an attorney who is helping you with legal documents.
Each of these situations requires you to be responsive because they all need your input in order to do some portion of their jobs, or to maintain their living space. One way to look at this is to think of everyone who needs something from you, as a client, whether an actual client/tenant or not. If you do not provide them information they need, you may miss out on a real estate deal, or miss a legal deadline, or have a tenant leave because they do not feel you are maintaining their unit properly for it to be habitable.
Not being responsive not only can cost you money and/or missed opportunities, but it also reflects on you personally. If people sense that you are not getting back to them in a timely manner, they may choose to not work as closely with you, meaning you may miss deadlines or lose out on an opportunity. There may also be an impact on your reputation, and cause other people to not want to work with you.
Why is responsiveness important for your real estate team?
Many of the same reasons mentioned above will apply to the team of people that you put together to help manage your real estate investment. I would argue that responsiveness on the part of your team is even more critical because they are working with people on both sides of the business. They need to work with you to keep you informed of any changes, needs, issues, etc., and they need to work with clients and other contractors to ensure compliance with contracts, projects, requirements, etc.
One specific area where responsiveness is critical is on the part of a property manager. If you have real estate in a location that is not close to you, and it is being managed, then close communication becomes critical. Since you are not there, you cannot visit the property to check in regularly. The property manager is your sole point of contact, as well as that of any tenants.
If there is a problem at your property, you need to be able to count on the property manager to let you know as soon as possible. This falls under the desired reaction definition, where they know that in an emergency, they need to tell you not just what is wrong, but how they are initially handling the situation, and finally, a long-term solution. If this communication does not happen, then a problem might persist, and/or get worse and propagate into additional problems.
As well, if you issue an order to your property manager, they need to respond either within a reasonable amount of time, or provide an immediate response in which they state a time-frame for action. This is important because some items are time-sensitive and you need to be confident that your directives are carried out.
You can find different examples of critical responsiveness concerning each of your real estate team members.
Finally, the degree to which your team is responsive reflects on you as a business owner. There is actually a twofold reflection on you since the focus is not directly on your interactions, but on those of people you have hired. The first impression for people is that responsiveness is a barometer of how much you and thus your team value other people’s time. The second is more second order, in that if people find your team to not be responsiveness, they may see this as a failing of the team members, but also of you in your ability to train your team, recognize critical business skills, and finally your judgment in hiring the right team members.
A responsive recap
The first thing to keep in mind is that real estate investing is a business. All businesses succeed to a degree by how they manage interactions with other people. One aspect of this interaction is responsiveness, the ability to respond in a desired and/or positive way, or being quick to react or respond to a given situation.
The need for responsiveness applies whether you are completing a task for a client, providing direction or information to someone on your real estate team, or interacting with a contractor.
If you are not responsive to a client, most likely a tenant in the real estate case, then they may very well think you do not consider them to be important. At that point, they may simply stop attempting to work with you, which may mean that problems occur at your property that go unreported, or they may simply move out, either immediately or at the end of their lease. This could mean the loss of a desirable tenant and thus steady income.
If you do not pay attention to requests or issues with neighbors, you open yourself up to potential legal action, property disputes and potential damage to your property.
Your team needs you to be responsive because in many ways, you have the final say on their tasks. If you don’t give approval, everything slows down, deadlines may be missed, and small problems may turn into large ones.
Conversely, you need to have a real estate team that is responsive as well. If they ignore tenant requests or problems, those may turn into more serious issues, or the tenants may simply leave. If they do not respond to you in a timely manner, you may lose track of where a project or property stands, and miss a deadline, or let a project get off track. This can cost you time, money and hassle. Finally, if your team is not responsive with each other, or other contractors, you will likely encounter delays and inevitably pay more for projects or services. More seriously though, in this case, is that your reputation may be damaged and you may lose the opportunity to work with the best people for a particular service or in a real estate partnership.
It is important to remember that just as it is a business for you, it is also business or a material need for your team and your tenants. When you have made a commitment to someone, it doesn’t matter if you are doing this as a part-time gig, or a full-time business, they have an expectation that you will follow through.
If you make the effort to be responsive in all facets of your business, and surround yourself with a team who share that goal, you will likely find yourself with more people wanting to work with you, and better relationships with tenants and neighbors. Taken together, that adds up to a successful real estate business.