Turnkey Investing Concerns

[Silas Melson]

I’m trying to get my feet wet in real estate investing, but I’m drawn more to the passive route. Active real estate investing doesn’t seem to float my boat. What are people’s opinions on turnkey? What are the typical fees that turnkey investors charge?  Are they flat fees or percentages? My goal is to achieve a good cash flow and rent out properties for a long time. The cash flow first, the appreciation to be the icing on the cake.  

[Nicholas L.]

@Silas Melson

hi. a few reactions.

1. there's no cash flow in the short term on a turn-key property.  none.  after the property is stabilized, the rent has increased, etc. you may see cash flow.  that is typically 5-10 years+ of ownership.

2. turnkey isn't entirely passive. you have to manage your property manager. they are responsible for doing whatever their management agreement says they're responsible for, and you are responsible for doing what it says you're responsible for.  if you ever have a major repair, or an eviction, or a major turnover, you may need to be a little more 'active.'

hope this helps. turnkey might be a good fit for you. but real estate is a long game.