Why is setting goals important?##
People who set goals are 10 times more likely to succeed compared to the ones who don't. According to a Harvard Business Study, only 3 percent of their MBA graduates were found to have defined goals for them. It was these 3 percent of graduates who earned almost 10 times as much as the other 97 percent. Owing to this powerful impact of goal setting, 45 percent of Americans usually set goals for themselves, whereas 38 percent of them have never set goals.
People who set goals for themselves have a result-oriented approach instead of taking their lives day-by-day like people who do not set goals or develop plans for themselves.
Most importantly, these people are consistent, disciplined, and consider their time as their biggest asset, unlike others who waste this valuable asset. Those who have goals keep themselves in check if they are procrastinating. It is not only important to set goals, but also important to set your goals in the right way. Following is a checklist for you to set your goals:
- Make sure your goals are highly specific
- Be clear why you are setting a certain goal, what benefit would it bring for you
- Develop a thorough step-by-step plan to reach that goal
- Be consistent and disciplined in following this plan
- Track your progress towards the gradual achievement of your goal.
What are SMART goals?##
SMART Goals are based on the acronym SMART for Specific, Measureable, Attainable, Relevant, and Time-Bound. These are important for success in real estate investments. While goals can be audacious, it is hard to achieve something complex. People get stuck in the process and make very little progress. Breaking down a goal into smaller bite-sized pieces helps you to make progress. By using SMART goals, you can identify and establish what is meant to be achieved. SMART goals are not unrealistic that it cannot be measured or practically attained. They must be contextually relevant, and must have a defined deadline by when it should be realized or attained. Defining these bounds helps to devise a plan of action.
Setting SMART goals##
Setting SMART goals help divide your real estate investment dreams into smaller, practical steps, and lets you keep track of both time and progress. By setting a SMART goal, you have more command over the process of achieving your dreams and know what exactly needs to be done to achieve it. The image below shows how to think through the process.
SMART vs. Regular real estate investment goals##
SMART goals, unlike regular goals, give you the required kick and show you a clear direction. You can become more organized and start managing real estate investment like a pro by setting SMART goals. When there is a deadline attached to your goal, you will be more enthusiastic about achieving your goals because you know that the clock is ticking.
If a person sets a goal to be financially independent, he may not be as specific and enthusiastic about it as when he plans to be financially independent before turning 40. Now that the time has been set, the struggle towards the achievement of this goal will naturally pick up a pace. This is an example of a SMART goal setting that shows how time attached to the goals makes them a lot more effective.
Importance for the landlords and property managers##
SMART goals are of even more importance in real estate investments. Investors and landlords can be specific (or SMART) in terms of numbers and can work according to the deadlines. For instance, some investors see beyond the simple cash flows and focus more on appreciation because they have specific goals and know what is more important of the two. Others choose Class C properties to achieve their target cash flow numbers.
Real estate investments are long-term plays. Very few people make quick wins. However, the leverage it offers helps you to accumulate equity while the property appreciates in due time. Starting early gives you an advantage to build equity.
Being relevant is one aspect of great importance for landlords and property managers. With the evolving trends in technology and other innovations being introduced every other day, landlords and property managers can easily stay focused on planning and strategizing. For example, developing and maintaining properties that are more relevant and suited to the preferences of the next generation is one great instance of staying relevant in the real estate industry.
Examples of SMART goals for property managers##
Property managers need to be extremely vigilant in property dealings, be it with the potential tenants, with the landlords, or the investors. With the increasing competition in the field, it is high time they start setting SMART goals to differentiate themselves as a property manager.
For example, “increasing my listings” is a vague goal. So instead, a SMART way to set goals as a property manager is to state it as:
“increase my listings by 50 percent of the current number in the next five years”
Other examples can be:
“Increase website traffic by 10 percent in the next two months.” “Get 100 more sellers on board before December 2022.”
Examples of SMART goals for landlords##
Landlords need to plan well if they want to grow their real estate investment portfolio. If you want to attract ideal tenants, you must set SMART goals for yourself. For example, “decreasing tenant turnover” may not serve the purpose as effectively as “reduce the tenant turnover by 20 percent by 2029”. This goal is not only specific by defining the percentage of reduction but is time-bound as well. Based on this, you can plan the steps to achieve this goal. Example steps include: screen tenants better, improve the condition of the property - update kitchen in all units by 2023, update bathrooms by 2025, change floors by 2027, etc. You can further break this down by setting how many units will be updated per month.
As time passes, the progress can be measured by tracking the percentage reduction at the end of each year. Besides, the percentage set is also attainable according to the time set for realizing it. Other examples can be:
“Get all required repairs done by August 31, 2023.”
“Publish my property for rent ad at 10 websites today.”
Wrapping it up##
Setting goals is smart, but the goal now itself needs to be SMART to ace the game. The key is to keep your goals simple and realistic. Proceed one step at a time instead of trying to reach the top directly. There are no short cuts, only intelligent routes.