Turnkey vs buying rent ready through a realtor

[James Rader]

Hello BP,

I live in Houston and am looking to buy my first income property.  I'm planning to buy and hold and plan to use a property manager.  I'm military and move regularly so I want a hands off investment.  Naturally, I've been looking at turnkey companies buy have also been thinking of contacting a realtor to find a home that doesn't need a rehab and is ready to rent.  Searching on HAR, I've found a few that are already tenanted.  My thought is that I may be able to capture more equity if I find a deal outside of a turnkey provider.  Thoughts or advice anyone?

More info- I'll be using conventional financing, 20% down.  I'd like to invest ~25K, so a property in the 100k price range.  Thanks in advance.

James

[Larry Fried]

@James Rader You are right a true turnkey, one that takes care of all the major elements such as roof, mechanicals, plumbing, electrical and flooring to a high standard of life left or new should provide you a fairly low maintenance investment for years, but you have to watch for those high standards, not all turnkey companies are the same, and some can do some pretty low quality rehabs.  Excellent property management is also key to avoiding costly turnovers, etc.

One alternative to turnkey investing that I have have been focusing my buy and hold on, puts my interests in close alignment with the managers.  And it is very passive. I have written about my investments with this company in my blog article: 

Have I Found the Holy Grail of Passive Real Estate Investing?

You might find it an interesting read.