How to Allocate Your Time as a Real Estate Investor
It may be a cliché, but the phrase “time is money” is true, especially in the field of real estate investing. Despite the lengthy process of buying and selling property, the faster you can move things along, the better.
If you’ve ever felt as though you’d benefit from less sleep and more time to work, you’re probably familiar with the troublesome quest for effective organization. The advantages of speed in business are well-known, but time management is one of those skills that’s easier in theory than in practice. Adequately allocating time is extremely challenging, especially for active professionals with a long list of things to do and only 24 hours in the day to do them.
However, excelling in time management means more than simply keeping an up-to-date calendar and scheduling all your appointments. This may seem like enough at the present, but to truly rise above the competition, you need to understand the ins and outs of an experienced approach to allocation.
The Perils of Perfection
Perfectionism is a common trait of many industrious professionals. A need to have everything exactly right is often intoxicating for those who value a seamless experience in everything from an open house to drawing up closing papers, and that’s okay – sometimes. However, to truly make a difference in how you spend your time, moving on from a hyper-intense view on perfection can be the key to increasing productivity.
You may find this idea startling, and if you do, you’re not alone. Most real estate pros go above and beyond to create an ideal experience with every task they undertake, and many believe this is the only way to get things done. It is not. Every little detail does not have to be perfect all the time, and settling for good enough can be a great opportunity for time savings.
A certain standard need to be maintained for client-facing tasks, but for the little details that don’t need to be flawless, you’ll have a better experience by making sure your results are adequate but not overdone. Wasting time on tasks that don’t make a difference will only take away from the things that matter.
It’s a hard lesson to learn, but once you accept that perfection can be the enemy of progress, you’ll suddenly realize how much more time you have available.
Create a Compelling Calendar
Some investors manage to float through the real estate world, working on what comes along in no order, but these people aren’t likely the success stories you hope to be. When it comes to your real estate investment practices, the more specific you can be about scheduling, the better. Allocate your time based on expectations, prior experience, and availability, and be sure to factor in what tasks can fall into the practice of “good enough” by budgeting proportionately less time to those tasks.
Hone in on Value
When it comes to the things on your to-do list, it’s easy to feel as if everything on your agenda deserves a place of honor. However, to maximize the time you have available, you need to highlight where you’re able to add value, and where you’re just squandering time.
To assist in making judgment calls regarding your time, classify your outstanding tasks using a three-tier system in the following categories: investment, neutral, and optimize.
Investment tasks are ones that require a high commitment and caliber of work in exchange for a big payoff. This kind of task might include offering prospective sellers a tour of your property; if you don’t invest the time in getting this exactly right, you may risk losing out on a sale entirely.
Neutral activities need to be completed but don’t require your full attention. This may be something like attending business meetings; you spend time here, but you don’t need to pour your heart and soul into your time commitment. Acceptable effort is adequate.
Optimize tasks have little bearing on your overall success no matter how much time you spend on them. Administrative tasks, like filling out simple paperwork and answering basic emails can fall into this group. You don’t need to spend hours crafting novel-length email responses; a few sentences that get to the point will make the same impact.
Once you categorize your to-do list, you’ll have a much better idea of how much time to assign each activity. Be sure to prioritize in this order, too; optimize tasks may be easier or more fun, but wasting your time here can hurt you in the big picture.
Define Where You Won’t Spend Time
You put a lot of effort into rating the parts of your day by their potential to add value, but this isn’t where the process stops. Before deciding on a final allocation of your time, you also need to start honing in one what not to include on your to-do list.
What not to schedule can include both professional and personal categories of tasks. In general, these items should be the least important things on your agenda, including tasks that you don’t need to do yourself, or work that you don’t need to do at all. This can mean dropping out of community events that have no bearing on your success, skipping unnecessary meetings that won’t further your goals, or delegating tasks like cleaning or gardening to a hired third party.
Once you decide what doesn’t deserve your time, delete these activities from your calendar and don’t put them back on. When you want to truly excel, the areas not worth your time now likely won’t be worth your time later, either.
It would be nice if humans could function without eating, sleeping, and taking occasionally breaks, but that’s not realistic. At the end of the day, there must be a give and take. Your value-adding task breakdown can help you take an accurate view of what it will take to succeed, but you still must have a practical idea of your own capabilities.
If you can answer an inbox full of emails in three minutes while still reading and retaining everything, great. But note that this may not be possible, and attempting to squeeze an important task into an impossibly small timetable could cause you to miss out on a good opportunity because you’re moving too quickly.
Instead, consider observing the time investment you put into tasks before dropping them onto your calendar. If reviewing prospective properties (which would be classified as an “investment” tasks under the three-tier system described above) usually takes you an hour, give yourself a full hour instead of trying to cut your time allocation down to 35 minutes. Consider also what you can multitask and what you can’t. Answering emails can be done on the fly from your phone while you’re waiting for meetings to start, but it can’t be done while you’re in a negotiation meeting with an investor. If you’re considering cutting into investment activities with optimize tasks, stop, regroup, and take another look at how your time is best used.
You have limits. When scheduling, you need to abide by them.
Learn to Let Things Go
As you learn how to give up on perfection, you’ll necessarily need to learn how to let the little things go. As a successful investor, you may be used to handling everything yourself. Unfortunately, as you allocate your time with productivity in mind, this is simply not possible to sustain, especially as you begin to scale your portfolio. You can’t paint the living room of the home you’re staging by yourself to save cash if it will mean compromising the quality of your closing paperwork.
Instead, learn how to outsource things that aren’t investment tasks. Neutral and optimize activities can often be assigned to other parties, like third-party contractors or coworkers. Even if you know how to fix a leaking sink, there’s no reason to get down and dirty with a wrench when you have more important priorities on hand.
When at all possible, let go of the tasks that can be done almost as well by someone else as they could be done by you. Remember, perfection is an illusion, and spending 15 minutes mulling precisely where to drop a For Sale sign isn’t an investment in your earning potential. Let someone else take over, and put your focus back where it matters.
An effective approach to scheduling is not easy, especially when you have a lot to do with only a limited time to do it. However, learning how to approach your work with a focus on value rather than convenience can be a critical lesson in how to improve. Once you learn how to leave perfection behind, create a schedule based on the tasks that allow you to invest in your business, and take a realistic approach to management, you can truly focus on what matters.
Developing an effective approach to scheduling will take a big change to your normal operating procedures, but allocating time properly can provide the direction you need to move ahead of the competition and ultimately maximize your returns on your real estate investments.
Scott Clift is a licensed real estate broker with Westpark Equity Group and the private lending division of Westpark Loans. He has been in the real estate industry since 1994. His team of seasoned professionals specialize in providing real estate loans for investors and other self-employed individuals. When you are ready to invest in real estate, call Westpark Loans to secure your financing at (844) 574-LOAN or by visiting westparkloans.com.