In this article, I will share what are turnkey properties in real estate, their advantages and disadvantages, and how to find the best turnkey property to buy in your neighborhood. Plus, some property management company tips if you wish to manage it for a better rental income.
I will share everything you need to know about turnkey properties. Make sure you read the complete article and understand how the game works. So now let’s begin.
What is Turnkey in Real Estate
Turnkey properties are basically a full-functioning house that is occupied or ready to move in and available for everyone. The house needs to be in working condition with no damage to any appliances and utilities or no obvious structural or electrical issues.
It can be a house, duplex, or apartment building that is fully functioning and ready for you to rent out immediately. They require little to no effort from investors. It means you can generate income on your property much faster than other investments.
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Advantages of Turnkey Properties
Here are some big advantages of turnkey properties that will surely attract you as a sophisticated investor.
- Very low or no repairs are needed on the property as it’s like new.
- The repair costs will remain low if required for some years. That will boost your cash flow in no time.
- The property is in rent-ready condition or has tenants in it already.
- Getting a tenant is very easy as they can move in today.
These property advantages can boost anyone’s greed. After knowing about these advantages of investing in turnkey properties, people will run after it like they have found a GOLD mine.
Disadvantages of Turnkey Properties
But there are some disadvantages also that you must know before investing a single penny of yours. Those are as follows.
- Turnkey properties can be expensive and require more investment while purchasing.
- People who repair those homes and make them ready to live in spend a good amount of money on them. That is why it’s expensive.
- Finding a good turnkey property is difficult as most houses you will see will be a fixer-upper. Fixing those will take time.
Overall a turnkey home is like a regular home but with some extra benefits. If you think these disadvantages are nothing, you can go for it. But know how to find a good turnkey investment at an affordable price.
How to Find Turnkey Homes Under 100k
Finding a good turnkey house under $100,000 is not rocket science. These properties perform best in areas where the average monthly mortgage payment is lower than rent.
Plus, a city with a growing population, job vacancies, inexpensive real estate, and high occupancy rates is the ideal location for your turnkey real estate investment.
Turnkey investing has no different from traditional rental property investment in due diligence. Here are some due diligence ideas that you can use for your research to buy a house for less money.
- Look for areas with low tenant default rates.
- Find properties that fit within your investment budget.
- Forecast your potential cash flow by analyzing the neighborhood area.
- Know the property appreciation rate and how it can affect you.
- Hire reliable property management services to manage the property efficiently.
So you can buy a turnkey house for under $100,000 if you follow these due diligence method step by step.
Is a Turnkey Property Investment Right for You?
You might ask these questions after knowing all these advantages and disadvantages, is it for me? Only you can answer that, but I have something that might help you to make the right decision.
- Turnkey properties are for you if you prefer to handle the renovations yourself to keep the purchase price as low as possible.
- These homes are for you if you are looking for a rental property that is ready to move without extra work or headaches.
- It is for you if you don’t mind investing a few extra thousand dollars to get a live property, not a dead one, and can earn money from its first month.
Look, your choice may vary over time and with the effect of financial and market conditions. But if you really want to take the benefits that a turn real estate offers despite its disadvantages, then you are choosing the right investment.
How to Buy a Turnkey Property
But before you go out there and buy whatever you find on the road, have a look at how to buy a good investment house or what makes a good turnkey real estate investment.
Here are the exact steps you should follow while buying a turkey real estate investment.
- Find a good market to invest in
- Know how to get the financing
- Find a top-rated turnkey provider in your town
- Analyze those properties that you have found
- And buy the best one and put it on rent
Follow these so you can choose the best house and can fulfill your dream.
What is Turnkey Property Management
Now you might be asking, do we need a property management service for a small turnkey property? The answer is NO. But if you have more than three properties on rent, hiring a property management service, especially for turnkey properties, is a good move.
Here is the list that a turnkey property management company will do for you if you hire them.
- Finding a great property in an undervalued condition
- Funding most of the investment
- Acquiring and Renovating the property
- Managing the property efficiently
- Planning for the future
You can see here these property management services not just only manage our property but also help you find, acquire, and plan for the future. That is why hiring a management company is the best move. They will help you in your success.
Turnkey Property Solutions via Mathematics
These are the average metrics that investors have found over a period of five years. They say turnkey properties are the best real estate investment for the following reasons.
- People tend to stay in turnkey properties for an average of five years.
- More than 75% of tenants renew their first lease.
- It has less than a 2% eviction rate among the tenants.
- Only 4% average vacancy rate or less.
- Just 5% annual maintenance cost of the total income.
If you are still confused about investing in turnkey real estate, then these data make your doubts clear. I would say go for it.
So that’s all for what are turnkey properties in real estate, how to find and buy the best house in your town. I am not an expert, do your due diligence before investing. I hope this article has helped you. Thanks for reading. See you soon.