Should I invest in turnkey properties

Question

I am still trying to identify my personal REI philosophy, and I am wanting to know if investing in turnkey properties are a good route to take for someone new to REI like me.

What are the pros and cons of investing in turnkey properties?

Can anyone recommend some reputable turnkey property businesses?

Account Closed · Answer

you live in the turnkey capital of the world why would you not just buy one of those sub 30k properties and do it yourself ? If you were an east or west coaster who is priced out of your local market then you would be looking at turnkeys form your own state

James Wise · Answer

@Josiah Mosley

Living in Columbus yourself I think your best course of action is to meet with a local Realtor/Property Manager. Go around with him/her and choose a property(s) that you are comfortable with. Since you have the ability to do so buy as close to your neighborhood as possible so you can self manage if you ever want to.

You are in an incredibly low barrier to entry market so don't get to caught up in the turnkey dynamic. Remember a rental is a rental.

David Panzera · Answer

Hi, @Josiah Mosley

I've been a real estate investment broker and property manager in Columbus for a long time and my thoughts are that you need to really do your research with turnkey companies. To do it right, a turnkey company basically needs to do what a full blown investment broker does and not just put in any tenant to make a quick sale. An investment broker will help find the right property for you with their knowledge of the local market and the ability to run numbers for you on cash flow, and in the property management part of their business they'll be able to take over landlording and fully vet tenants for you through their screening process to make sure the right tenant is in place. Message me if you'd like to talk further, and good luck!

David

Charles Worth · Answer

@Josiah Mosley

As others have noted, you live in a fairly good area for RE which most TK investors do not. You may however still want to go the TK route for your first investment and think of the TK process as an education cost. Since they only deal with investors most TKs or hybrid TKs are used to holding an investor's hand. @James Wise and @Engelo Rumora are both based in OH.

Curt Davis · Answer

What market are you interested in?  You are in Ohio and there are plenty of TK operators in your area so you could start there if that is where you choose to invest.  There are also several other markets.  Property management will be one of the biggest factors to your success.  Obviously getting a solid home that is newly renovated will be important as well.

Good luck

Marco Santarelli · Answer

Welcome to BiggerPockets @Josiah Mosley!

Identifying your investment philosophy and defining your investment criteria is very important right from the beginning because if you don't you will stumble and fall along the way to figuring it out, and that can become very costly!

The first question to consider is how much TIME you have to be able to "invest" in your real estate investing.   If you have a lot of time then you can probably acquire, scope, rehab, and flip (or hold) properties with the help of the right team (contractors, etc).   If you don't have a lot of time then turnkey investment properties can make a lot of sense for you.

Another question to consider is your knowledge and experience levels.   You mentioned you're a "newbie".   A lot of our clients are new as well and find that turnkey properties are the ideal way to start building their portfolio of properties.

I started investing long ago (age 18) and have invested out-of-state since 2003.   I've made my fair share of costly mistakes, which fortunately has led to my success and perfection of a system that work for me (and others).

If you do your due diligence, and select a good market or two, then there won't be any "cons".  Follow a proven system with a reputable company that will "hold your hand" and not throw you over the fence to other people that don't have your best interests in mind.

The above is true for both new and seasoned investors alike.

Continued success!

Marco Santarelli · Answer

Regardless of where you live and its price point, that's often putting the carriage before the horse.  One's investment strategy should begin with their goals and criteria in mind.  That will determine what and  where they should invest in.

Simply buying "cheap" properties with good looking numbers (on paper) can be a recipe for disaster for some, especially if they don;t know what they're doing or lack experience as a real estate investor.

NOT all markets are the same.  NOT all properties are the same.

Continued success!

Scott Trench · Answer

Hi @Josiah Mosley Welcome to BiggerPockets - it's great to see more folks deciding to get into REI!

If you are interested in finding Mentors, I recently wrote "The Ultimate Guide to Finding Incredible Mentors"- check it out!

I'm always happy to help point you in the right direction for resources or tools on BiggerPockets that can help you with your REI goals!

Ali Boone · Answer

I'm a huge fan of turnkeys personally and they are all I've bought for myself I am also a huge advocate of newbies buying them because I think when so much of the harder stuff is done for you, it allows you more time to focus on learning the fundamentals and can dramatically decrease risk.

My only thought though...if you live in Columbus (or any of the Ohio) cities, why or where are you thinking about turnkeys? Typically you'd be able to find local properties there that would cash flow nicely. I know I'd buy turnkeys if they existed in my local area, just for ease of process, but most people don't agree with me on that one. Mainly because you could, in theory, save a lot of money by getting a DIY property if you are local.

Justin Ericsson · Answer

Josiah,

Turnkey-reviews.com lists reputable turnkey operators like my company.  I would recommend starting out with a Turnkey operator and learn as you go. Once you have acquired a few properties I suggest working with a good broker in your back yard.

Should I invest in turnkey properties

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