I’m a firm believer in setting goals, and with the new year approaching quickly, now would be a great time to consider the goals you have for your real estate investing business for 2018. Many real estate investors I know run from one great deal to the next without a clear idea of how those deals fit into their strategy. By doing so, they end up purchasing properties that make no sense to their overall goals.
That’s why I recommend using SMART goals. This system can help you stay focused and invest in properties that make sense for you. Smart goals are those that are:
- S: Specific
- M: Measurable
- A: Attainable
- R: Reasonable
- T: Timed
Let’s see how using SMART goals works for real estate investors.
Specific Goals
If you look up real estate investing, you will see that it covers buying and holding for rental properties, fix and flip, wholesaling, commercial, multifamily properties, and more. That’s why it is so important to be specific when determining your investment goals.
A specific goal would include not just that you want to buy real estate investment properties but would state what kind, how many, and a timeframe in which you would get it done.
Measurable Goals
No matter how hard you look, there are not any real estate investors who don’t want to make money on their investments. So, a goal such as, “I want to make money with my real estate investments” would be true, but worthless. Measurable goals help you quantify what you want to achieve. This can be numbers such as properties bought, monthly income, or a specific return on investment.
I’ve learned that if I can’t measure a goal, then I have no idea if I’ve met it. Being the best real estate investor in Scottsdale Arizona can mean many things. However, if I state that I want to buy ten properties with a 10% ROI during 2018, then I can know if I meet my goal.
Attainable Goals
Reaching for the stars is fine, however, when determining goals for the year, they should be something that you have the chance to attain. For instance, I may wish to flip a home and make $100,000, but that is not very likely. In fact, if I have this goal, I am more likely to quit being a real estate investor when I realize that I can’t do what I set out to do.
Instead, make sure that you set goals that you can control and attain. As an investor, you can choose where to purchase properties, and you can choose the price you pay. By doing so, you can look at attainable goals that make sense.
Realistic Goals
Realistic goals and attainable goals are similar. However, a goal that is unrealistic is impossible. It is possible to make $100,000 on a flip if you are lucky enough to find a great property at a great price in a neighborhood that is selling like hotcakes. However, it would be completely unrealistic to assume that every property could have that kind of success.
Other unrealistic goals could include:
- Doing all deals without outside help
- Doing an extensive number of deals while still working full-time
- Expecting exceptionally high yields on every property you purchase
Reasonable goals consider your own resources, including your time, money, and partnerships.
Timely Goals
Finally, your goals need to have a time frame so that you know what needs to be done in order to achieve the goal in a timely manner. For instance, “I want to attend as many networking functions as possible” has no timeline. As the investor, you would never know when you had done enough.
A better goal would also be more specific and measurable, such as “I want to attend two networking functions per month.” Now, not only do you know when you’ve achieved your goal, but you can create a plan of action that gets you to two functions each month.
Although goal setting may take a little time, doing so can make the difference between being a successful real estate investor or not. Keep in mind that goal setting is just the first step. Once you have SMART goals, it will be time to figure out just what you are going to do to accomplish those goals. Contact me today for help creating your own SMART goal plan or determining your strategy for reaching those goals during 2018.
