Is Turnkey Investing Right for You?

Turnkey real estate, in simple terms, refers to one that has been acquired, renovated, and rented to a tenant before it is sold to you, the investor. Typically, the turnkey company also runs the day-to-day operations of the property for you (property management).

On Passive Income

Given the turnkey definition, the benefit is clear then for you as the investor. You can collect passive income while in a contract with the property management company, who guides you through the process.

Therefore, turnkey investing is right for you if the idea of receiving a passive investment for a steady yield sounds favorable to you. As well, you must value service and quality more than dramatic returns.

Keep Your Free Time

Rather than doing upgrades on the investment property yourself, turn that workload over to the turnkey company. They have the contractor, repair man, and agent on speed dial. You don’t have to try to find those people, which takes away your free time, not to mention that you might not have the expertise to hire the right people.

Take your days off to spend with family or friends, rather than upping your workload. Use turnkey sellers, who are experts at renovating and selling quality properties (when you use a reputable turnkey company).

For a Brand New Investor

If you are just starting out in the investing world and can barely scrape together the down payments on investment properties, you would be best to avoid turnkey investing. You would probably end up getting sucking into a cheap turnkey property that won’t perform up to the level you expect from it.

Maintaining High Standards

What should this performance level be? The real estate turnkey company should cover all of the performance for the property, and it should quickly answer questions of both the investor and tenant. You should never have deferred maintenance, either.

This central focus of the turnkey company on customer service helps you to feel secure in your investment, even if you do not live in the local area where the property is situated. You must be able to maintain a high standard with turnkey investing for it to be successful.

Diversity

If you are looking to diversify the type of real estate that you hold in your portfolio, then turnkey investing may be the next best step for you. As turnkey companies are located across the country, you can look at properties out of state and be able to collect regular checks in the mail from them as an investor. When you diversify, you reduce the systemic risk and strengthen your financial position.