Researching the turnkey real estate investment property industry can present a lot of information to new investors. The decision to buy any property is one that must be made when good sources of information are used. There are are a lot of positives about turnkey properties that are not always found in online research. Presented here is a list of five turnkey investment property truths for new investors.
5 Turnkey Investment Property Truths
1. Tenants Are Included
Investors who purchase homes at foreclosure auctions or through other resources are usually responsible for fixing or repairing issues before these homes can be rented. The additional costs of marketing a property available for rent can increase the cost of fix and flip real estate. A turnkey property has tenants under contract currently renting the property for a long-term lease.
2. Property Management is Optional
One benefit for property investors who purchase properties out-of-state is the management that can be acquired for a monthly retainer. Property management companies offer daily management of properties although this service is optional. Some turnkey properties owned by companies do not include management services. Investors who are able to purchase turnkey properties with a management option could find this management option useful.
3. Prices Can Be Cheaper
The initial price paid to purchase a vacant property for use as an investment property might only be the first phase of payments. Homes that are not renovated or require major repairs can increase the purchase price over the ownership period. Investors who purchase turnkey properties buy into a home that is completely renovated and legally ready to rent to tenants. The fixed price attached with a turnkey property is often cheaper than low priced foreclosures that some investors are lead to believe is a good deal.
4. Designed for Long-Term Growth
Because turnkey properties are setup for immediate ROI, these properties are designed to provide long-term growth. The lease agreement that is initially signed by renters is typically for a period of one to two years. This provides a continued return on investment. Properties that have property management company assistance can ensure that renters are in line to rent a property when one lease term is completed. This can provide extended stability for rental income.
5. Not Free From Future Repairs
All rental properties will require some form of repairs during ownership. Renovated properties can provide a good start on a long-term real estate investment although issues can happen that require payment for repairs. Turnkey properties will need repairs at some point and contractors must be hired to perform these repairs. Annual inspections could be required for pest control, radon gases and other issues that come with ownership of a rental property.