Are turnkeys overpriced?

[Diane Tycangco]

Hi everyone!  I was thinking of buying a turnkey for the first time and was comparing the turnkey prices with Zillow estimates of what the property was worth.  The difference is so big!  Now Zillow does not know what renovations have been put into the property, right?  Also, the property management fee 8-10%, plus 15% maintenance fee - if they call the repairman or something, they tack on 15% to the repairman's bill, plus a yearly fee of $250 or a lease renewal fee of $250, adds up to a lot, especially because you are relying so much on the turnkey management since you are so far away.  What do you all think? Are turnkeys overpriced and management fees too high?  With these fees and higher prices, how can we make money?

I was looking at Memphis and am thinking of Dallas or Houston but property taxes are too high in Texas.  Any thoughts?

[Lee Ripma]

@Diane Tycangco

Zillow is not accurate, at all. Turnkeys are sold at market price so you’re not going to get much equity when you buy but you’re also not doing any work. Google the 4 wealth generators of real estate and see which ones TKs give you. They work for some people, not all people. So it’s not really so much about the turnkey properties as it is about you and your goals! They may meet your goals, they may not. If they don’t figure out your goals and how to meet them.