Understanding Turnkey and Premium Turnkey
The term “turnkey” is an overused term in the real estate industry and it means different things to different users.It is important to know exactly what you are getting when someone uses that term.
The term “Turnkey” was first used in real estate to describe a home that needed absolutely nothing before you could move-in.You could literally “turn the key”, walk in, and live there.That is what it still means to traditional real estate agents.
However, the definition is slightly different when referring to investment properties.A Turnkey investment property means that there is a Tenant in Place.Many wholesalers call any rehabbed property turnkey.A recently rehabbed property is good, but that does not make it Turnkey.
Others in the industry use the term to describe any property with a tenant in place and no immediate repairs are needed.The good news is that the property already has a positive cash flow--and this is technically the correct use of the term--it could mean that repairs are on the horizon because the property is not recently rehabbed.
We are now introducing Premium Turnkey Properties.These properties have tenants in place (which meets the technical definition of Turnkey) and the property has had a recent rehab guaranteed with a warranty (which is why it is Premium).When the roof, furnace, water heater, A/C, and other features are new, you can expect significantly lower maintenance costs.These properties can still be Graded A, B, C, or D depending on a variety of other factors (see article on Understanding Property Grades).
Whether you buy investment properties from us or anyone else, be sure to know EXACTLY what the seller means when they tell you they have a “Turnkey Property.”Make sure you are getting the properties that will enable you to realize your financial goals.