who has done turnkey

Question

what are your thoughts/experience with turnkey for starting

Theresa Harris · Answer

While some of the places I've bought are not recently renovated, I have bought homes that require no renos and have been happy with them. A couple only needed minor things (ie painting), another needed a lot of work.  Not everyone wants to (or should) do renos. Buy what works for you.

Drew Sygit · Answer

@Neil Warren you are paying for someone else to do all the work for you.

Also, you want the BEST inspection possible because you don't know the quality of the work.

Mike Paolucci · Answer

If it's your first investment property, turnkey is the preferred method to learn and not expose yourself to unnecessary financial strain.

You can still find turnkey deals that make sense but you'll need to act quickly because those deals get locked up extremely quickly.

Becca F. · Answer

I bought a recently renovated home, by the seller (a flipper who over priced the home). The home was built in 1920. After the inspection report, it needed about $1500 of repairs. I bought off the MLS using an agent not a turnkey company.

The pros:

- not having to do a major renovation from out of state

- easier to get a conventional loan since the house is livable vs. a distressed property (would need to pay cash, do a hard money loan, some other type of financing)

- can get a tenant in quickly

The cons:

- you don't know how good the renovation is, could be cosmetic without addressing underlying safety issues (plumbing, electrical, foundation, etc).

- a home can pass an inspection but once someone is living in it and putting daily stress on the house (turning faucets on, light switches, turning on heat/AC etc), things can start to malfunction. Tenant has called 7 times for repairs in 9 months on my "turnkey" home.

- the seller gets the equity and I'm also paying property tax on a higher assessed value (vs. if I bought a distressed house at a much lower price, that I renovated)

I'd be cautious buying old homes (e.g. 100 years old) that have been renovated. If I were to to it over, I wouldn't buy a house that old. Even with a turnkey, I'd recommend doing your due diligence, getting a full inspection and sewer line scope and if possible physically walking the property yourself if OOS. If you can't see the property in person, pay an experienced local investor $100 or so (someone unbiased, not your agent or turnkey company) to walk it and do a detailed video tour.

Bradley Buxton · Answer

@Neil Warren

There can be great turn-key deals you have to know your rents and know the comps in the area.  Buying new construction can also be a good investment because of the lower maintenance cost int he first few years. Builders will also offer rate buy-downs for investors lowering the monthly expenses. Here in Reno, NV area the new construction has been appreciating faster that the market in the last 6 months.

Jonathan Greene · Answer

I like turnkey for people who want to invest, but don't want to build a team. BUT, they often invest in the wrong team and trust all of the numbers. Turnkey is often confused with rent-ready and rent-ready is a better option.

Turnkey is all done, vertically integrated. You are buying into the property, the renovation that was done, and the management, and sometimes the tenant.

Rent-ready is a renovated home where you do inspections, close, and find your own tenants using either an agent or a property management team you find.

Christian Styles · Answer

Turn Key can mean a lot of things to different people, I've seen "turn-key" with what appears to be the original, 50's era kitchen and bath. Meanwhile at the other end of the spectrum there are turn-key providers who specialise in new-construction. It really depends on the provider, market, and still comes down to the house itself.

I would look for a provider who provides some sort of warranty or guarantee, and ask for references. I would absolutely still get your inspection, and make sure that their numbers line up with others in the area. Turn key typically comes at a premium since its designed to be "hands off" but make sure that premium is still marginally in line with the rest of the market.

who has done turnkey

Most Popular Reply