Mid-Year Reflections: Tips for Ensuring You Meet Your Year-End Goals
Wow…can you believe more than half of the year has come and gone already? It always amazes me how quickly time passes when you are having fun. We all know that in order for us to keep moving in the right direction in achieving our goals, whether personal or investing related, we must be able to take time to measure our performances against our expectations and goals. With only a few months left until the end the year, what better time than now to reflect back on where we are, where we want to be, and celebrate our accomplishments!
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Real Estate Evaluation
The first step in measuring where we are against where we want to be is to take a look back at what our goals were at the start of the year. Hopefully you had clear and measurable goals documented at the beginning of the year that you can now compare to. The next step is simply to look at what you have accomplished so far to determine if you are on track to meet your goals for 2013. Some items that are easily measurable are: number of properties you intended on purchasing, number of deals you intended to participate in, or maybe the type of deals you planned on doing. If your goal in 2013 was to acquire two new investment properties, you can easily know whether you have achieved your goal yet.
Up-to-Date Financial Information
Other goals may be a bit more time intensive to measure. For example, maybe one of your investing goals in 2013 was to increase your monthly rental income. In order for you to know your progress, you must first know how much income you are taking in every month after all bills are paid. If you have accurate and up to date financial information, then this process should be a piece of cake. If you do not have up to date financial information, then it may be a bit more time consuming for you to determine just how much net income you are taking in every month from each of your properties.
Proper Bookkeeping is Vital
I hear from a lot of investors, especially those rental properties, that having a bookkeeping system is not necessary. The most common reason I hear that investors forgo bookkeeping is that the management companies already provide them with management reports that track all income and expense items. Although this could be true in some instances, it may not always be the case. If your property management company pays for all of your bills, then they should have a fairly accurate report indicating the details of each income and expense item. However, if your management company pays for certain expenses and you as the owner pay for other expenses, then you will need to put in some time and effort to determine just what your monthly income is after considering all expense items.
Some of the items commonly omitted from management reports include interest payments, principal payments, property taxes, management fees, and insurance. Take a quick look at your monthly reports to make sure these items are tracked correctly. If not, speak to your accountant to determine an efficient way track these items so you can easily see your monthly financial activity in one single place.
“What Gets Measured, Gets Managed”
One of the best ways to determine your progress is with measurement. Organizing financial information, as mundane as it may appear, is actually the #1 secret weapon when it comes to management and growth. There is a saying that “What Gets Measured Gets Managed”. It is only with accurate and consistent measurement of the performance of our investments that we as investors can effectively reach and exceed our goals. After taking a hard look at your activities to date for 2013, ask yourself the following questions:
- Am I on task to do what I set-out to do this year?
- What are some areas where my progress has been slower than expected and how can I overcome the hurdles?
- What are the areas where my performance exceeded my expectations and how can I make them even better?
The answers to the questions above should help you to make any adjustments necessary to reach your intended goal for the year. So let us all push even harder for the next few months to not just reach but exceed our 2013 goals. When midnight December 31, 2013 comes, we can all tip our glasses in celebration of a job well done!