There are many tools to the international property market, ways in which you can give yourself the best chance of being a success, and one of the most powerful elements if used correctly is a reputation which few others can match. While few people can reach the levels of investment guru Warren Buffett or financial icon Lord Goldsmith there are some highly successful property investment entrepreneurs who have been able to use a reputation in what some would call a self fulfilling prophecy.
Is it really possible to make money on reputation alone?
While those who suggest that certain property investors do well because of their reputation alone this is not really the true picture as reputation alone cannot make you money but if used correctly it can give you great influence in the worldwide property market and open many doors.
Building a reputation
A reputation in any investment or social market does not happen overnight and will see the person or people involved encounter the good, the bad and the ugly side of any market in which they operate. There is no entrepreneur in the world that has literally built a reputation overnight and used this as a self fulfilling prophecy to increase their wealth and prosperity.
You will also find that with any great reputation there will have been failures and very often if a reputation is good enough the people involved are able to “bury their dead last night” which effectively means that all of their failures are ignored and people tend to concentrate on their successors.
Finance is a vital part of any investment market and the property market in particular is one which in many ways is founded upon debt which is structured in such a way as to see all parties receive a slice of future income and future profits. While some would question whether reputation or finance comes first, there is no doubt that a solid and successful reputation will open more doors in the finance market than for the traditional start-up investor.
Many of the larger investors in the international property market will also be able to curry favour with governments and wealthy associations around the world who are often desperate to attract finance, investors and employment opportunities to their region. Make no mistake, a large successful property development in any area of the world can be used to attract literally millions of people as we have seen in the tourist market.
As with any successful business there is a need to market your name and reputation as a way to attract other investors to a development or a region, after your initial investment, as this will see greater prosperity in the region and ultimately drive the value of developments higher and higher. In effect a successful marketing campaign can lead to the ultimate goal in any form of life which is a self fulfilling prophecy. Used correctly this can have a massive impact upon the wealth of not only the individuals involved but also the region and the local population.
If you have a reputation in the property market there is every chance they will receive invitations to become involved in many early-stage developments as developers look to use your reputation and standing to attract other investors while being prepared offer you a bottom of the range price to join the party. We see this time and time again in the retail sector where large name retail outlets are offered cut-price deals to join shopping centres and new shopping development around the world.
For example seeing Marks & Spencer in a new shopping development is highly likely to attract a large number of similar sized companies to the project as well as smaller companies looking to piggyback on the number of visitors the larger companies will attract.
Is there a downside to using your reputation in the property market?
There are real problems if all you live on in the future is a reputation as sooner or later you will fail. Reputation is not a replacement for solid research and sensible investment, and should only be used in conjunction with investments which are in their own right attractive.
If you depend upon your reputation to bring about future investment projects then as and when you do hit upon a failure, which will certainly happen, you have very little to fall back on. The higher the profile for the development the more risk to your long-term reputation and in many ways there may be nothing to gain and everything to lose.
The size of investments
Historically as property developers become more and more successful, create a better and better reputation the natural progression is to move to larger and larger investment projects which carry more risk. We have seen a number of property developers quite literally wiped out as and when they start to believe their own reputation and move on to projects which are too large and too risky to handle. The clever investor would use their reputation to bring in partners who would not only increase the profile of the project but limit the downside for any one investor.
The worldwide property market is littered with investors who build reputations over years only to stretch themselves and pay the ultimate price. Many will experience severe financial difficulties, and bankruptcy not uncommon in the property investment sector. When the going is good everyone is your friend but when the market turns reputation alone will not save you.
A solid high-class reputation in any investment or social market is something which everybody craves at some point in their life. However, dealing on reputation alone is a high risk strategy which can literally blow up in your face. The more you trade on reputation the greater the chance that at some stage you will fail and a high-profile failure would set you back in a very big way.
Clever property developers with a solid reputation will use this to both attract solid long-term investment opportunities and to bring in partners who can add to the project and also take away some of the risk. Do not forget that a reputation can be built over decades and literally lost overnight!