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The Top 4 Reasons You SHOULD Invest in Turnkey
I recently read an article detailing the top 4 reasons to NEVER invest in turnkey. (And yes, "never" was in all caps like that, so that author clearly meant it.) The reasons given included higher cost to invest, poor quality properties, and sub-par property management.
Pretty standard stuff. In some investment circles, turnkey has a bad rap, and these are the same reasons that are tossed around over and over again. If I’m being perfectly honest, I get it. There are some sketchy turnkey groups out there that have tainted our reputation as a whole, which is really unfortunate because there are so many wonderful things about this avenue of investment.
So that’s my job today. I’m going to share some of the awesome benefits of choosing a turnkey property, and give you 4 reasons you SHOULD invest in turnkey - especially if you’re looking for a passive investment.
- Local market experts. Turnkey investing is ideally suited for people who want to buy profit-generating real estate in a market outside their own. In fact, I would argue that most of the people who buy turnkey are remote investors. In these situations, it’s important to be connected with a local expert who knows their market inside out. You need a local presence who understand the dynamics and trends of the area you’re looking to invest in, and who can advise you of current and changing conditions. Even if you’re not a remote investor, though, it’s enormously helpful to have someone who’s highly familiar with your chosen market and can make sound recommendations based on market conditions and their knowledge of them.
- Move-in ready properties. This is where turnkey gets its name - the properties are completely renovated; you turn the key and you’re walking into a finished product. This means there’s absolutely no work to be done in order to rent the property, no dealing with contractors, and none of the headache that comes with renovation and repairs.
- Immediate cash flow. Because you’re buying a move-in ready property, that means it can be rented right away. In fact, many turnkey properties are already tenanted when you buy them, meaning that you start making money off the investment immediately. With other types of investments, there’s a weeks- or months-long period where you’re trying to get the property rentable, marketing it, screening tenants, and basically just waiting to make money. With turnkey, all this is done for you, so there’s no waiting, just immediate cash flow.
- Quality property management. Property management is a must for most investors, and definitely for those who are investing out-of-state. It’s also a critical piece of the investment puzzle, because bad property management can seriously damage your profit potential. Any experienced, reputable turnkey group knows this, so they work to provide investors with top tier management that will keep renters and investors satisfied. They’ll handle everything from rent collection to maintenance calls, so you don’t have to worry about it.
For investors looking for a passive investment strategy, each of these reasons illustrates precisely why turnkey is the best option. It’s truly a hands-off approach that allows people who are working full-time or who simply want less involvement to still get in on the real estate action and reap the rewards. True, you will be paying “retail price” for a property rather than nabbing it below market value, but when you factor in all the benefits and the money saved, you’re still coming out on top when you opt for turnkey.
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