Setting real estate goals is the first step in achieving financial freedom with real estate investing. Whether you're just starting out or you've had some experience with real estate, having clear goals will help keep you focused.
It's not unusual for people to point out how the neighbor down the block has six income-producing properties when asked why they want to invest in real estate. This is called confirmation bias and behavioral psychology shows that impulse investments rarely end well. Both new and experienced investors make mistakes. Some experienced investors fall into the sunk cost trap in which case they lose the ability to objectively assess a particular investment in relation to their goals.
Goal setting is the foundation of investing. Whether retirement, funding a child's education, getting a specific car, or just becoming financially independent, if your goals are set correctly, they will push you to go above and beyond to achieve them. These goals will provide you with a feeling of accomplishment when you fulfill them. And you'll be able to assess your performance and see what you could have improved.
What Are SMART Real Estate Goals?
Did you know businesses that set clearly defined goals are 10 times more successful than businesses that don't? A Harvard Business University study recently found that 83 percent of the population does not set goals and of those that do, 92 percent fail to achieve them. Number one: why are so few people setting goals? Number two: why aren't more people succeeding in accomplishing those goals? The reason is simple: because the goals most people set aren't setting smart.
S.M.A.R.T is an acronym you can use to guide your real estate business goal setting.
Fantasizing over your hopes and aspirations is far different from taking the time to sit down, put pen to paper, and set legitimate goals. Fantasies won't produce results, while smart real estate business goals will take your business to new heights.
Examples of SMART Real Estate Goals
As you get ready to strategize SMART goals of your own, it can help you think in terms of category. SMART goals can relate to anything, but it is helpful to group similar objectives. This allows investors to organize as they review each of the SMART characteristics. Here are three main categories and examples of each to guide you as you create real estate goals and objectives for your investing business:
- Business Goals: A business goal could relate to anything from lead generation to team growth. For example, one business goal could be to increase your social media followers by 10 percent over a six-month period. This could be done through word-of-mouth and paid online advertising. A business goal relating to investment deals could be to complete three wholesale deals in the course of a year. Where you start will depend entirely on your business.
- Personal Goals: Setting personal goals is a great way to make sure you are growing alongside your investment business. Common examples of personal goals include finishing one book a month for a year or listening to one investing podcast a week. Personal goals can help you expand your skill set, improve your day-to-day responsibilities, or make new relationships.
- Family Goals: As investors focus on SMART goals for their business and personal growth, it is important to set aside time for family or friends. A good example of a family goal is planning to take one day off from phone calls a week to devote more time to those around you. Similarly, many investors will set a family goal to take holidays off or plan a family vacation. Remember that these goals can be important for creating balance as you build a successful real estate business.
Make A Plan For Your Real Estate Goals
Depending on where you are in your real estate investing career, you may already have a concrete business plan for your investments. A business plan should include your mission statement, marketing plan, company hierarchy, portfolio, and more. This information is relevant to SMART investing goals because, as your business framework, these components should guide you as you make a plan of real estate goals. If you need more information on creating a thorough real estate business plan, start by reading this guide.
After you have a business plan, refer to each section as you brainstorm goals for the year ahead. A mission statement can help investors keep goals in line with their motivation and purpose, while the company hierarchy can reveal projects for specific teams to work on. On the other hand, the business marketing plan and investment portfolio can help investors identify areas for growth and improvement. In these ways, a business plan serves to shape and influence real estate goal setting.
The process of creating real estate goals takes time and patience. I recommend reviewing your business plan, consulting with your mentor and business partners, and reviewing the protocol below before writing your SMART real estate goals. Experts at Precondo suggest that “COVID and the following restrictions have wreaked havoc on the real estate industry, bringing several changes. Real estate agents need some goals to counter these changes. Researching the current market position is one of their primary goals. No matter where a realtor stands in their journey, keeping themselves updated is the key to success”.
Real Estate Goal Examples: Short Term Vs. Long Term
Real estate goals come in all sorts of shapes and sizes, so don't let anyone tell you yours are too big or small. That said, the best goals are those that move your business forward at a pace you are comfortable with. Small goals that can move things forward, for example, can be anything from driving by a predetermined amount of properties each month or talking to five new contacts a week. While relatively simple, these goals can have a lasting impact on the path your career takes. If you are more ambitious, however, you may be interested in setting larger goals. Since “larger” is a relative term, it may reference driving to more houses or even take place over longer periods of time. Nonetheless, the truth remains: Regardless of how big or small your goals are, the most important thing is that they move the needle.
Specific Real Estate Goals
Every real estate business goal you set should be as specific as possible. Clearly define every term within the goal and establish actionable steps to follow. If you want to improve this year's revenue, your goal should be more than “I want to increase my profits.” Alternatively, try “I want to increase this year's profits so that I can increase next year's marketing budget. I will start by evaluating my lead generation strategies and streamlining my systems. I will need the help of this employee and this mentor to make this goal a reality.” While not necessary, it can help create a physical checklist for yourself and cross out each stage of the goal as you accomplish it. According to the same Harvard Business University study, writing down your goals makes you 14 percent more likely to achieve them; so why not go the extra mile to give yourself the advantage? When drafting each goal, be sure to ask yourself:
- What exactly am I trying to accomplish?
- Why is this goal important?
- How will achieving – or failing to achieve – this goal affect my business' bottom line?
- What resources will I need to accomplish this goal?
- Who will need to be involved in accomplishing this goal?
If you have a valid answer for each of the above questions, your goal will meet the “S” criteria in the S.M.A.R.T acronym.
Measurable Real Estate Goals
Measurable goals will help you stay motivated by giving you the ability to track your progress. If you set goals that have metrics and KPI's, you'll be able to assess how much you've improved and how much work still needs to be done. When you take the time to track your progress, you're more likely to meet deadlines, and you will feel more excited as the finish line approaches. When your goals are not measurable, you're more likely to get off track and distracted.
Let's say you want to save up $20,000 by the end of the year. Instead of declaring such a broad statement, be more precise and say you will put an extra $1,000 into your savings account each week. This way, you can track exactly how much you're conserving and can easily make up the difference if you accidentally skip one week.
Attainable Real Estate Goals
Oftentimes, people set business goals that are so monumental, they become impossible to achieve. A brand new real estate investor shouldn't expect to flip 40 properties in their first year on the job. If you truly want to accomplish your goals, they must be realistic, or else you'll wind up feeling defeated; eventually, you will stop setting goals altogether. The goals you set should still be challenging enough to push you to your limits and exhaust your resources, but practical enough to accomplish. Ask yourself:
- Am I financially ready to take on this goal?
- Have I given myself the necessary time to accomplish this goal?
- What constraints or hurdles do I expect to face when striving to accomplish this goal?
If you take the time to address every negative scenario that could keep you from achieving your goal and subsequently identify the solution you will use to solve that potential problem – supposing that it arises – you'll be ready to take on whatever obstacle stands in your way.
Relevant Real Estate Goals
Setting goals that are relevant is all about ensuring that said goals matter to the current state of your business efforts. Establishing that you want to be CEO of a commercial real estate firm someday while you're still wholesaling properties in your local market part-time to pay the bills would not qualify as “relevant.” Creating long-term goals is important, and dreaming of a more successful future is a great way to stay motivated. But in terms of helping your business' bottom line, relevancy plays a more crucial role.
Time-Bound Real Estate Goals
This last step is pretty straightforward: give your goals a deadline. It is one thing to say you want to improve your real estate education this year; it is another to say you will attend either a networking event, REI club meeting, or industry conference two times per month for six months. When you create a target date for achieving each goal, you are more likely to remain distraction-free. What will you do today, next week, six weeks from now, and 3 months from now to accomplish your six-month goal? How will your six-month goal help you achieve your one-year goals? How will your one-year goals help you achieve your five-year goals, and so on? To be successful, be sure to celebrate wins and milestones along the way to keep your energy tank full.
Real Estate Goals For 2022
What should your real estate goals be this year? The importance of diversifying your portfolio and growing your real estate network cannot be understated and should be your prioritized real estate goals in 2022. As a real estate investor, diversifying your portfolio means investing in several different properties and real estate markets. Regardless of what kind of business field you work in, building a network of like-minded connections in the field is an essential part of your success and growth. As a new real estate investor, these goals may take some time to achieve, but the benefits of doing so cannot be overlooked.
The most important resource you have as an investor is your time. Think about the most important responsibilities you have in managing your business, and consider opportunities to automate the rest. Are there areas where your time and attention are absolutely crucial? What about other responsibilities that you don't necessarily need to handle? In any business, there are numerous ways to automize your tasks and get the most out of your daily schedule.
For example, consider using a customer relationship management (CRM) tool to help you track leads. Many of these platforms can deploy email campaigns, hold contact information, and even identify potential marketing opportunities. If you have a big focus on digital content or social media, try utilizing a software that posts automatically and tracks engagement. Similarly, you can hire a virtual assistant to take on these responsibilities and more.
The goal of prioritizing automation is to make sure you have more time for the things that require your attention. Think of you can best use your talents as an investor and identify ways to make that optimal schedule happen. You may find there are tasks you can even eliminate entirely. In cases where automation is more helpful, consider the numerous online tools and softwares available today. Many of these options are at low or no-cost to use. Set aside a little time to find the best options for your business, and help future you focus on the important tasks.
Diversifying Your Portfolio
Diversifying your portfolio may seem like a daunting real estate goal for new investors. It is a common belief that a single property investment is a safe and stable way to keep your finances secure. However, this is not always the case. Investing your time and energy in diversifying your real estate portfolio has proven time and again to be a more stable and beneficial strategy.
For example, let's say you are investing in a VRBO or Airbnb rental property in Portland. Your real estate goal for 2022 should be to expand your investments to the wider range of the Oregon real estate market. You can also diversify your portfolio by looking into other real estate investment strategies in the local area.
It is a common misconception that more properties present you with more likely risks. In fact, the opposite is true. The main goal of diversifying your real estate portfolio is to reduce your risk. Diversifying goes hand-in-hand with the common saying, “Don't put all your eggs in one basket.” In doing so, any risk is now split between all your investments. If a problem were to occur in the Portland real estate market, it would not affect your other assets.
An important real estate goal for 2022 should be to open yourself up to investing in multifamily properties, REITs, commercial real estate, or any real estate niche you have not looked into. Do your research and find which type of investment is best for you. Real estate is a vast business field, and opportunities are everywhere. More properties do not equal diversification. The best practice is investing in various types of properties across several locations.
Growing Your Network
Building and growing your network should be an ongoing real estate goal for not only 2022 but throughout your career. Your success in any business is reliant on the connections and relationships you build. It is not enough to go to a few seminars and collect a few business cards. You need to keep your network constantly refreshed with new people and ideas. Your network will always consist of buyers, sellers, agents, investors, lawyers, and accountants, but you should not limit yourself there. Make one of your real estate goals to meet researchers, demographic analysts, experts in tourism, and economists who will give you insight into different markets and areas that affect real estate.
If you find yourself at a real estate networking event, your goal should be to cultivate relationships with those you have already met while simultaneously introducing yourself to new faces. When you start to think of growing your network as an ongoing real estate goal, you will find yourself with not only a high quantity of connections but higher quality relationships as well.
Remember, whether in real estate or any other field of business, there is always more to learn. There is also never only one way to think or strategize. Growing your network opens you to ideas as well as individuals. It is the best way to discover real estate niches that you may not have thought of before. In turn, you will be more knowledgeable, experienced, and successful.
No matter where you are in your real estate investing journey, educating yourself and staying up to date on market trends are crucial. After the many lasting changes brought on by COVID-19, staying up to date on industry news is critical. Consider developing a routine for reading the news, reviewing real estate analytics, and brushing up on real estate regulations in the year ahead. There are numerous podcasts, online resources, and webinars to help you accomplish this plan — you just need to find what works best for you.
Thinking Big And Setting Goals to Get There
Most individuals, according to Tony Robbins, underestimate what they can accomplish in a year but overestimate what they can do over a decade.
What does this mean for your real estate syndication business? To maximize your chance of success, you should regularly set goals to meet and establish action plans that keep you moving forward in alignment with those goals. This will help provide clarity around what matters most so that when opportunities arise, you'll be in the best possible position to capitalize on them.
Remember, it's not about working hard but smart so that you can enjoy life while making an impact. Just like with investing money, your accomplishments compound upon one another and propel you in a non-linear, upward trajectory. So, celebrate your achievements and go out there and conquer this next year and the next and beyond! What you're dreaming of can be yours, and it starts today.
The takeaway? Continue setting big goals and planning your road map to success with Goodegg Investments by your side. We're here to help make achieving those goals a reality.