Smart apartment investing decisions start with knowing your values and goals. When you know your values and goals, you’re more likely to make good decisions and less likely to make a decision you’ll regret later.

There’s another benefit. You or your broker may learn of a price reduction or rent increase or increased seller motivation or some other important fact. Such opportunities are fleeting, and you must act quickly to seize them. You can decide more quickly and with less analysis if you already know what’s important.

Many investing guides encourage you to articulate your investment goals. That’s important. But it’s equally important to know who you want to be and the legacy you want to leave. I encourage our clients to identify their values first and then create their investment goals.

What are your values?

I have done several values clarification exercises over the years. Usually you must choose one value from each of a series of pairs of values. One pair might be health and wealth. Another might be being great at work and being a great spouse. At the end of the exercise you can examine the profile of what you think is important. That’s fascinating, but the exercise isn’t over.

Ideally, the way you spend your money and your time will match up well with your stated values. Usually there’s a discrepancy. If you want your stated values and lived values to match up, you must change something. Then you can make investment decisions that reflect your values.

What are your apartment investing goals?

Every investor has a unique situation and investing goals, but those goals tend to fall into one of the following five categories. Your goals may change when your situation changes.

You may invest to build wealth. If this is your goal, you’ll seek properties you can renovate to add value. Then you’ll sell the property and move on.

You may invest to maximize cash flow. This goal is often for people who are at least retirement age and content with their net worth. They’ve built a substantial inheritance, and they may have been deferring gratification for several decades. The extra cash will enable them to do things they’ve always wanted to do but put off.

You may invest to achieve steady cash flow with almost no management. At “retirement age,” many households move equity out of apartments into buildings leased by a national business tenant with bond-rated credit.

You may invest for pride of ownership. Some investors buy rental properties that demonstrate their wealth.

You may want to invest in a “fallback property.” You could live there yourself if your circumstances crumble, or you could rent to your sister at a discount if she separated from her husband.

It takes time and mental energy to clarify your values and investment goals, but it’s worth the effort. When you know what’s important to you and your investment goals, you can make better investment decisions more quickly.

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Terry Moore, CCIM, is the author of Building Legacy Wealth: How to Build Wealth and Live a Life Worth Imitating. Read his “Welcome to My Blog.

Click here and find out how Terry and his team can help you make the most important financial decision of your next decade.