In my opinion, setting a SMART goal is the very first thing anyone looking to invest in property needs to get nailed.
What exactly do you want to achieve from investing in property?
SMART stands for Specific, Measurable, Achievable, Realistic and Timed.
It is important to be very clear with your goal. Many new and even experienced investors waste time, effort, energy and money going around in circles as they don`t have a clear and defined property investing goal.
Let me ask you this:
Have you ever hit the road without a named destination in mind, if not why not? and if so, did you end up in the best, most perfect location for you at that time?
9/10 new to property investors don`t have an exact destination in mind 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 I plan a SMART goal I hear you ask?
Easy, write it down, as loosely as you like, in fact simply answer this question.
What do you want to achieve from investing in property? Don't overthink it, don't try and make it complicated, just write it down.
At this stage your goal doesn't need to be perfect, having anything down on paper is better than nothing.
However, by making your goal SMART, you will give yourself the best possible chance of success.
Taking your goal, rewrite it and make it very specific.
S – Specific: let`s 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 your goal drill it down 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 no longer rely on my career to fund my lifestyle.
Great start, next up is M – Measurable:
How will you know when you have achieved your goal?
You could 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, this income will be generated solely from rental properties. I will have quit my current job and be relying solely on income generated from a property portfolio to fund my lifestyle.
Then A – Achievable, is your goal achievable?
You could write:
From my research, a BTL property costing £100,000 in my area will generate a minimum of £250 net income pcm. I will need to acquire 8 BTL properties to generate a minimum of £2000 net income pcm. I will need approximately £240,000 for deposits and costs.
I can release £200,000 of equity from my residential property and over the next 2 years, I can save £40,000.
But is this Realistic?
R – Realistic: It's important to do your research and ensure that your goal is realistic, I suggest asking questions such as: has my goal been achieved before? Is my research and data accurate? Do I have the funds, Do I have the time? Am I skilled in what is needed?
You may write:
I know more than 5 people who have achieved this exact goal in my chosen area. I have allowed enough time to acquire the properties needed. I have the funds to acquire 6 properties and can save enough from my corporate wage for the final two properties, as a backup plan I will try to acquire properties below market value and refinance to release further funds. However, I do still need to find the properties and to understand the best properties to buy, where to buy and how it all works. To ensure I upskill in these areas I will work with a buy to let property mentor who has already achieved my goal.
And finally, how long will it take you to achieve your goal?
T – Timed:
You could state,
It takes approximately 6 months to acquire one property, I need to acquire 8 properties and have given myself 4 years, this is 2 per year and 1 every six months. I will achieve my set goal within the next 4 years.
My last day at work will be on 12.12.20.
And there you have it, now you have a SMART goal, in this example, the investor is looking for BTL, single let properties costing approximately of £100k that will generate a net min of £250 pcm. To achieve this goal two properties a year are needed over a four-year period totalling 8 properties. The investor has the time and funds, they will become educated on which properties are best by working with a mentor and the investor's goal has been achieved by others. When a passive net income of £200,000 pcm is achieved consistently over a 3-month period the investor will have achieved their goal.
Remember your goal needs to be personal and tailored to you.
Good luck and happy investing.
