Property Investment Goals: A Landlord's Guide to SMART Thinking
by Property Investments UKThe Property Investments UK editorial team have been researching and writing about the UK's property market for more than a decade.
If you want to achieve something worthwhile you should always have a goal (or maybe several goals) to work towards. Property investing is no exception. It tends to be much more successful when you set goals. Here’s how you can use what is known as the SMART approach to goal setting to achieve success as a landlord.
What is the SMART Approach to Goal Setting?
In simple terms, SMART thinking is a goal-setting framework.
SMART is a well-recognised approach to achieving your goals in both your business and your personal life. SMART is not solely a landlord strategy but it applies very well to this type of business.
There are many different interpretations of the SMART thinking framework. It is thought that the origins of SMART goal setting date back to the 1980s when it was outlined in Management Review magazine by George T. Doran and in Peter Drucker’s Management by Objectives (MBO) concept.
SMART is both a mnemonic and an acronym. It stands for Specific, Measurable, Achievable, Relevant and Time-Bound.
Access our selection of exclusive, high-yielding, off-market property deals and a personal consultant to guide you through your options.
SMART Thinking (In Simple Terms)
SMART thinking is based on setting goals that comply with five basic criteria. Your goals should be:
Some authors have developed the SMART framework into the SMARTER framework. SMARTER stands for Specific, Measurable, Achievable, Relevant and Time-Bound plus Evaluation and Review.
How SMART Thinking Works
SMART thinking works by creating positive statements surrounding the goals you want to accomplish.
Each positive statement needs to be designed in such a way as to make it clear what you are going to do in order to achieve each goal.
Pros and Cons
The main advantage of SMART goal setting as a landlord is that it breaks a complex goal down into smaller goals that are simpler, more manageable and easier to work with.
A possible disadvantage of SMART goal setting is that it can take the spontaneity out of doing something. There is a risk you will take too much time SMART thinking and goal setting and less time actually working on being a landlord.
SMART Landlord Thinking: Getting Started
Here is what you need to think about before you can begin SMART thinking for landlords:
- Think about what it is you want to achieve.
- Know what it is you want to achieve.
- Write down what you want to achieve.
- Create your own SMART thinking goals – see the next section.
- Take action! Get started.
- Review your progress. Make tweaks and changes as necessary.
Specific, Measurable, Achievable, Realistic and Time-Bound
So, let's have a look at every letter in the acronym to see what it's all about and illustrate a few examples.
SMART thinking starts by setting very specific goals. Being specific helps you focus in on what it is you are trying to do, and helps you set the steps you need to follow to achieve it.
Ask yourself: what do I really want?
Vague goals very often aren’t achieved. Goals like ‘I want to be a landlord’ or ‘I want to get rich in property’ aren’t specific goals.
- I will learn what being a landlord involves.
- I will raise enough cash for a mortgage deposit.
- I will find a buy-to-let flat I could buy.
- I will get an offer accepted on a buy-to-let property.
- I will find a good tenant for my property.
- I want to build a portfolio of properties that will provide me with enough income to live comfortably on.
Measurable in SMART thinking means using metrics or setting benchmarks. As well as setting specific goals you need to devise a way of measuring your progress towards those goals.
You need to be able to measure how far you have gone towards achieving your goals. And also by how much or how little you have missed them. This will allow you to make adjustments and get back on track towards achieving them.
Ask yourself: how will I know I am succeeding (or failing)?
Again you need to be specific. A goal like ‘I want to be a successful landlord’ isn’t a very useful measurement.
Monetary goals are the easiest type of goals to measure. But goals may also be non-monetary.
- I will save at least £250 a month towards a mortgage deposit.
- I will raise £10,000 for a mortgage deposit.
- I will draw up a list of 10 possible properties I could buy in my chosen area.
- I want to buy at least one property this year and then three more a year for the next three years.
- I want to be earning £100,000 pa in rental income as a landlord.
To be achievable a goal needs to be something you stand a good chance of being able to do. Achievability needs to be based on where you are on your landlord journey now, even if you have not started it yet. You can become more ambitious with your achievable goals as you progress through your journey.
Ask yourself: Am I highly likely to achieve this goal?
Unless you already have several hundred thousand pounds a goal such as ‘I want to make a million’ from property is not an achievable goal right now. But as you progress through your journey it may become achievable.
- I will dedicate 5 hours every week to my property business.
- I will sign up for a property training course and complete it.
- I want to get a decision on principle on a buy-to-let mortgage.
- I want to be in a position where I can make an offer on a property.
- Now I have my first property I want to find two more to buy within the next 3 months.
SMART thinking goals need to be relevant to what it is you want to achieve. They need to be directly linked to your overall objectives of succeeding as a landlord in some way.
Ask yourself: will this goal actually help me in my ambition to become a landlord for the first time, or build my portfolio?
- I am going to research how I can find the money to get started.
- I am going to do market research in my area to find the best location in which to let property.
- I am going to contact agents and get particulars of properties for sale in my chosen area that may be suitable for buy-to-let.
- I will start viewing some properties.
- I will apply for my landlord's licence (where a licence is needed).
A very good way to make goals easier to achieve is to set a timescale or timeframe for them. If you have a date to work towards you are much more likely to achieve a goal.
Time-bound goals may be linked to achieving your overall goal but time-bound goals based on small steps towards achieving it are more realistic. Shorter time-bound goals are usually more achievable than longer time-bound goals, and they also make the long-term goal more achievable too.
Time-bound goals can be based on different measures of time such as a date, the number of days or even your age.
- I will have identified five buy-to-lets that suit my requirements by the end of next month.
- I will have found my first property to buy by the end of March.
- I want to have bought my first buy-to-let by the end of May.
- I want to be making 100% of my income from being a landlord within 5 years.
- I want to retire by the time I am 50.
An Example Formula
While a SMART thinking strategy can be applied to any kind of business or personal endeavour here is an example of how it can be applied to the business of being a landlord.
- Specific Goal: I will learn what being a landlord involves.
- Measurable Goal: I will save at least £250 a month towards a mortgage deposit.
- Achievable Goal: I want to be in a position where I can make an offer on a property.
- Relevant Goal: I want to start viewing properties.
- Time Bound Goal: I will have a property-based pension within five years.