SMART Goal & Strategy Setting
In my opinion setting a SMART goal and having a step by step strategy is the very first thing anyone looking to invest in property needs to get nailed.
SMART stands for Specific, Measurable, Achievable, Realistic and Timed.
It is important to be very precise with your goal and to have a step by step strategy I place before anything else.
Let me ask you this,
Have a you ever hit the road without a named destination in mind, with no sat nav or a road map? If not why not? and if so, did you end up in the best, most perfect location for you? and if by the off chance you did, did you get there in the most efficient way possible?
9/10 new to property investors have no exact destination in mind and have not planned out their route using a map, and therefore they fail. If you don`t know where you are going how will you ever know if you have arrived?
So how do you workout what your own SMART goal is I hear you ask?
Easy, write it down. As loosely as possible in fact answer this question for me
What do you want to achieve from investing in property? Don't overthink it, don't try and make it your best work just write it down.
Now taking that sentence rewrite it and make it very Specific
S - Specific, Let me use an example that you may have written down
“I want to give up my job and use the money I make from property income as a wage”
When you rewrite the sentence drill it down and go more granular to create something like this
“I would like to achieve a passive net income of £2000 per month generated from rental properties. This income will replace my current wage and I will leave my current job”
Great start, next up is M - Measurable
How will you know when you have achieved your goal?
You would write something like this,
“For me to hit my goal I will consistently (more than three consecutive months) receive £2000 passive net income on a monthly basis, the money will be generated from rental properties only. I will have quit my current job and be relying solely on income generated from a property portfolio”
Then A – Achievable, is your goal achievable?
You could write,
“From my research a BTL, single let rental property costing £100,000 in my area can generate £500 net income pcm. I will need to own 4 BTL, single let properties that generate a min £500 net income pcm. I will need aprox £120,000 for deposits and costs.
I can release £200,000 of equity from my residential property that will provide the funds I need”
But is this Realistic?
R - Realistic Its important to do your research and ensure that your goal is realistic, I suggest asking questions such as, has it been done before? Is my research accurate? Do I have the funds, Do I have the time? Can do what is needed?
You may write,
“I know more than 5 people who have achieved this exact goal in the area I`m am considering, my time frame, current financial situation and abilities will allow me to achieve my goal, I do need find the properties and to understand the best properties to buy, where to buy and how it all works”
And finally, how long will it take you to achieve your goal?
T - Timed
You could state,
“I will achieve my set goal within the next 2 years, this means I will need to acquire at least 2 new properties per year. My last day at work will be on 12.12.20”
And there you have it, now you have a goal, in this example the investor is looking for BTL, single let properties costing a max of £100k that will generate a net min of £500pcm. To achieve this goal two properties a year are needed over a two year period. The investor has the time, the funds, the ability and the set goal has been achieved by others.
Next up is where the magic really happens, you now have a destination, you know exactly where you want to go but how on earth are you going to get there?
Simple you put a route or a strategy in place that will give you a step by step guide on how to achieve your goal.
Let me give you some examples
1. Define a goal and put a strategy in place (remember to be SMART with all entries) this will be done by week 1 and set a completion date so you have something to work towards.
2. Speak to a property specialist accountant and decide on buying in own name or LTD company.
3. Speak with a mortgage advisor to ensure are eligible for a mortgage.
4. Set up a LTD company.
5. Set up a LTD company bank account.
6. Line up a solicitor ready to start offering.
7. Decide on an area.
You now have a road map and a strict timeline to follow, the best out there only ever do activities and work that will get them closer to achieving their goal.
Its very easy to get side-tracked by shiny new and exciting opportunities however by referring back to your SMART goal you will be able to quickly get your mind back on track and remind yourself what it is you need to focus on.
Good luck and happy investing.