Questions/worries about turnkey rental props

[Shari Posey]

I've been thinking about turnkey properties and one thought keeps popping up in my mind and I wonder if it's valid...since these props come with a tenant already installed, have some made a side deal with the tenants to slide some money under the table and beef up the rents for the length of the lease? Obviously I will have to do my own due diligence on rental prices but some that I've seen seem higher than market, which is what makes me wonder.

Also, how long are you locked into their property management system typically? Some of the management fees seem on the high side as well.

[Ali Boone]

Same reason flippers don't keep the houses they buy, Shari. Buying and holding isn't their model. Turnkey providers are essentially flippers. And they use the money from one sale to buy another and keep rolling it over and over. They wouldn't have the capital, most wouldn't, to hold all of them. Just a different biz model.

I'm not sure the benefit of sliding money under the table to tenants. Not sure what that would get anyone. You can always ask a separate property manager their take on what a property would rent for and compare that to what is being charged.

Then lastly, the property managers work for you, not the other way around. You are free, or should be free, to ditch them anytime you want. I don't buy into that contract nonsense with terms on time. I fire managers if I don't like them, no question.