Pros and Cons of Turnkey Investing

Member since 2025 · 1 post · 0 votes

I know that turnkey might not lead to the best financial savings, but I like how most of the work is done for me. Any other pros or cons to this method of investing for at least getting started?

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James Wise

Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

Quote from @Alex Mull:

I know that turnkey might not lead to the best financial savings, but I like how most of the work is done for me. Any other pros or cons to this method of investing for at least getting started?

Pro - Someone else does the work for you.

Con - You have to pay someone else to do the work for you.

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Jared Smith
Real Estate Agent · Lakeland, TN · Member since 2015 · 214 posts · 105 votes
1y
@Alex Mull as some with experience in both turnkey and all-in active investing, I can tell you the biggest advantage is saving, time, hassle, and some full-service turnkey companies mitigate your risk by doing the upfront renovations and placing qualified residents while the company still owns the house. A bonus is if that company also manages and will stand behind that property after the sale to an investor like you.

if you have the time, desire, risk tolerance, and knowledge, you can absolutely find and or create deals on your own.

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Walter Bowser
Member since 2023 · 44 posts · 19 votes
1y
Turnkey is great for a first time investor. I typically recommend a new construction for a true turnkey property as the builder typically has some sort of warranty. This means for larger ticket items they will cover some maintenance or repairs on them.
If its home that went through a remodel, typically there is not any sort of warranty and you will still experience some work orders come in.
Either way, great option for some investors and currently there are still some deals out there that you can walk into equity with, which is typically why you'd want a non-turnkey property.
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James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
1y
Quote from @Alex Mull:

I know that turnkey might not lead to the best financial savings, but I like how most of the work is done for me. Any other pros or cons to this method of investing for at least getting started?

Pro - Someone else does the work for you.
Con - You have to pay someone else to do the work for you.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
1y
Quote from @Walter Bowser:

Turnkey is great for a first time investor. I typically recommend a new construction for a true turnkey property as the builder typically has some sort of warranty. This means for larger ticket items they will cover some maintenance or repairs on them.
If its home that went through a remodel, typically there is not any sort of warranty and you will still experience some work orders come in.
Either way, great option for some investors and currently there are still some deals out there that you can walk into equity with, which is typically why you'd want a non-turnkey property.

builder warranties are for 1 year typically.. but you know the warranty is only as strong as the builder.
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Walter Bowser
Member since 2023 · 44 posts · 19 votes
1y
Quote from @Jay Hinrichs:

Quote from @Walter Bowser:

Turnkey is great for a first time investor. I typically recommend a new construction for a true turnkey property as the builder typically has some sort of warranty. This means for larger ticket items they will cover some maintenance or repairs on them.
If its home that went through a remodel, typically there is not any sort of warranty and you will still experience some work orders come in.
Either way, great option for some investors and currently there are still some deals out there that you can walk into equity with, which is typically why you'd want a non-turnkey property.

builder warranties are for 1 year typically.. but you know the warranty is only as strong as the builder.
Here in Oklahoma, its either 1 or 2 years, yes. The two builders I suggest, are typically pretty great on their warranty. Ultimately, I agree with you its as strong as the builder. However, purchasing a "turnkey" flip, typically I have had more maintenance issue from items being flipped cheaply or incorrectly, with no warranty at all. Most maintenance won't pop up in the inspection report, its more apt to pop up after having someone live in the property for the first month.
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Jay HinrichsBusiness Member
Real Estate Consultant · Summerlin, NV · Member since 2014 · 45k+ posts · 66k+ votes
1y
Quote from @Walter Bowser:

Quote from @Jay Hinrichs:

Quote from @Walter Bowser:

Turnkey is great for a first time investor. I typically recommend a new construction for a true turnkey property as the builder typically has some sort of warranty. This means for larger ticket items they will cover some maintenance or repairs on them.
If its home that went through a remodel, typically there is not any sort of warranty and you will still experience some work orders come in.
Either way, great option for some investors and currently there are still some deals out there that you can walk into equity with, which is typically why you'd want a non-turnkey property.

builder warranties are for 1 year typically.. but you know the warranty is only as strong as the builder.
Here in Oklahoma, its either 1 or 2 years, yes. The two builders I suggest, are typically pretty great on their warranty. Ultimately, I agree with you its as strong as the builder. However, purchasing a "turnkey" flip, typically I have had more maintenance issue from items being flipped cheaply or incorrectly, with no warranty at all. Most maintenance won't pop up in the inspection report, its more apt to pop up after having someone live in the property for the first month.

agreed. what I see is a major issue with used homes is plumbing and people NOT doing sewer scopes on their home inspections..
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