Is Today’s World More Complex or Convenient?
Why relying on convenience is risky.
When I was thinking about the investing world that I am involved in most of each week, I wondered how it has changed over the years.
Has it gotten more complex or more convenient?
The short answer is: Both
In my work, I mentor people to learn about investing in residential real estate far away from where they live with the help of diligently selected turnkey providers.
That, in itself, sounds inconvenient because all the things that are easily done within a few miles from where you live are now to be done at a distance, often across time zones. On the other hand, it is much more convenient than having to find an agent, and a bank, and a title company, and a contractor, and many more service providers if you were to find, renovate and rent out a property on your own. It can be done as David Greene has described here.
Is it complex to do? That depends on your own experience. In my world, it is more complex because I had to learn that the word of a service provider cannot be taken as the truth until I have formed a deeper relationship.
What do I mean by that, you ask? Well, it used to be that there were only a very limited number of real estate agents in any given market and they developed areas across a town or region. Most of the time a broker had a bunch of agents and the brokers in an area all worked with each other. Yes, there was competition, but it was all civil and mainly in the service of growing a customer base. Now you have all kinds of online platforms like Zillow, Redfin, etc. that give access to MLS listed properties. Anybody from anywhere in the world can find them. Pictures are taking by professional photographers who are being told to make the property look as glorious as can be. Perspectives can be very deceiving.
Then, there are platforms that allow you to search for rent levels, for crime rates, for economic development predictions, for the counties and cities general plans, and on and on and on. In addition, more and more innovators want to break the paradigm of agent commissions. It used to be an unwritten law that a house purchase had 6% of commissions attached. 3% for the broker and 3% for the real estate agent. Recently all kinds of new offers are coming up that reduce and in some cases almost completely eliminate these commissions. Depending on the price of a property that can be a substantial amount of money for buyers and sellers. Still, when you reduce cost you typically also lose value and increase competition. I have the impression that agents of all kinds are more and more fighting to retain their piece of the pie and the customers/buyers can be lost in the mix.
The volume of information available can be overwhelming.
In my work, I spent a lot of time to develop a very limited number of relationships with providers. That leads to a mutual dependency and removes all the noise and clutter from the picture. Here is why.
When I start purchasing properties from one of the few selected turnkey providers and help my mentoring clients to do the same, this provider is more and more interested to keep me as a happy customer. If they reduce services or don’t do good work, I will move my business and the management of my properties to other companies, but more importantly, I will no longer send my mentoring clients to them either. That would be a double loss. On the flip side, it’s a great incentive to perform above and beyond average.
In the beginning of the development of a property portfolio, especially if you are doing it on your own and don’t hire a coach or mentor, you will have to face all the complexity and inconvenience.
One solution, is to get help from the start and avoid all the aggravation. The other option is to quickly develop relationships with a trusted source and stick with it.
When we pan out to other aspects of life I think it is valuable to evaluate where we really need the complexity that is presented to us and where it is in the way.
My car offers me to play the radio, Pandora, the content from my Bluetooth connected mobile phone, satellite radio, or content from audiobooks. What happened to just two nobs?
My TV offers me a training tutorial to learn how to operate it so I can decide if I want Hulu, Netflix, Amazon Prime, YouTube, Apple TV, Internet direct, etc. and I don’t even have a cable contract.
We find more and more areas in life where those who have something to offer seem to think that sheer availability is all that’s needed. I hope we will soon enter a time where the offerings are provided with elegance, simplicity, convenience, and dependability. In a recent presentation, Elon Musk said that it is not far in the future when we can use Neuralink to think what we want and then get it. Maybe that is a better solution than having to dig through the ever-increasing complexity we are faced with these days.
Don’t even get me started on what the fridge, the oven, and Alexa are discussing these days…
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