It’s hard to believe that Christmas is over and 2015 is right around the corner. It just does not seem like another year has already passed us by. With New Year’s just a few days away, it’s a good time to gather with friends and family and celebrate what lies ahead.
It is also a good time to sit down and think about your real estate business, to assess where you have been and prepare a plan for where you want to go. So gather up your numbers, get those spreadsheets ready, block out some time and think about the following six questions regarding you and your business.
Download Your FREE Tenant Screening Guide!
Hey there! Screening tenants can be a tricky business, and this critical step can be the difference between profits and disaster. To help you with your real estate investing journey, feel free to download BiggerPockets’ complimentary Tenant Screening Guide and get the information you need to find great tenants.
6 Questions to Ask Yourself at the Year’s End
1. What went right over the past year?
This is a fun question to ask. Everyone always remembers what worked well and what made them prosper and I hope something went right for you in your real estate business in 2014. Did you flip your first property? Did you buy your first rental? Did that retail flip sell like you thought it would? Whatever your success, now is a good time to think about how you are going to replicate it and improve on it!
2. What when wrong over the past year?
This question is a bit more difficult to ask, but it is perhaps the more important one. No one likes to remember what went wrong over the last year, but think about this: do you want to repeat it? Of course you don’t.
So you have to think about what you did wrong and take steps not to repeat it. Did you fail to run your numbers properly? Did you skimp on your screening process? Whatever it was, take a hard look at what went wrong and make plans to avoid it in 2015…
3. Were there any surprises?
Surprises can be both good and bad. Hopefully you had more good ones than bad ones. Surprises can also be very difficult to plan for; after all, they are surprises. But I ask this question because I like to look back and determine how I handled the surprises that came up. Perhaps a deal dropped into your lap, and you needed to scurry to find funding. Perhaps a tenant suddenly went bad, and you were forced to evict.
Whatever the surprise, what did you do to handle it? Did you have enough resources? Did you know the right people to call, the right procedure to follow? Think these things through and develop new procedures and cultivate new relationships so that these types of surprises are not so difficult to handle in the coming year.
4. What would you change?
Think big. Think small. If you could change anything at all about your business, what would it be? Would you flip more? Would you buy more rentals? Perhaps you would like to expand in another market or pay off some debt. Whatever it is, develop your answers into some goals for the coming year. Keep them reasonable and achievable. Most importantly, write them down!
5. What should you change?
Notice the slight difference between this question and number four above, would versus should. Just one letter, but a very different meaning. We can all think of things we would like to change, but it is a bit harder to think of things that we perhaps should change. The problem here stems from human nature: we like it when things are comfortable. It is comforting to use the same systems or processes over and over again. It is comforting to limit yourself to one market or type of property. It is comforting to use the same contractors, attorneys, etc. over and over again. It is just easy to do things the way we have always done them.
But what if those systems are actually causing problems? What if there are more profitable opportunities in other markets or in undertaking other endeavors? What if your contractors are charging you too much or doing a poor job? Every business has to adapt and change because the market that we all work in is changing everyday. There are things that we just should change if we want to survive and keep growing. Think carefully about this question and use it to plot some goals down for the coming year.
6. Where can you spend now to reap rewards later?
Do not be afraid of spending money to improve your business and your productivity. It could be something as simple as a new computer and access to a database, or it could be as complicated as hiring a maintenance person or initiating a marketing campaign. Whatever it is, think about how you can use your time in a more productive fashion and on tools that will help you achieve that productivity.
So there you have six questions that will have you taking a hard look at you and your business at this time of year. Think about them carefully. Write some answers down, and then take a break. Return to them again later, perhaps after a couple of days, and think about them again. The answers should help you develop a strategy for 2015 — a strategy that will hopefully make 2015 a very happy New Year!
What questions do you ask yourself about your business at this time of year? Care to share what worked and did not work for you over the past year and your plans for the future?
Don’t forget to leave a comment below!