Tuesday Tip: Set Key Performance Indicators to Reach Your Goals

[Matthew Cervoni]

This week's Tuesday Tip is about one of my favorite topics, high quality bookkeeping helping real estate investors achieve their goals! 

Remember, bookkeeping is more than just the tedious task of organizing historical financial data for your investments or real estate business. It can be used to raise capital, save money on taxes, and make better investment/business decisions. 

Setting some Key Performance Indicators (or KPIs) is a good way to pull more meaning out of your financial statements. This can help you better understand past performance and make adjustments to improve your investment or business. What you decide to measure will depend on your goals, but here are a few examples of KPIs: 

Monthly cash flow per unit

Debt-to-Income Ratio

Dollar or Percentage Growth

Loan-to-Value Ratio

Personal Hourly Rate 

What are you measuring and what do you hope to achieve? 

For these to be meaningful, the underlying financial data does need to be correct. If you are unfamiliar with bookkeeping principles I would recommend getting a professional real estate bookkeeper to keep your books current and correct!