The Turnkey Investor’s Guide to Choosing a Profitable Real Estate Market

by |

Shopping for turnkey rental properties? Trying to figure out where to buy one? Where do you even start?

Well, the best place to start is with networking. Find out where other people are buying, find out who is having luck in which market and with which turnkey provider, and shop from there. But how do you know how to sift through all the information? Or better yet, how do you decipher whether or not the referrals you are getting are good ones?

The trick to getting into any good real estate investment deal, turnkey or not, is to have at least enough knowledge going into it to know whether what you are being told is true or not, or whether it fits what you are really trying to do. That’s what I’m going to help you with — giving you just enough information to start the process, and then you can go from there.

Download Your FREE copy of ‘How to Rent Your House!

Renting your house is a great way to enter the world of real estate investing, but most first-timers (understandably) have a lot of questions. Fortunately, the experts at BiggerPockets have put together a complimentary guide on ‘How to Rent Your House’. All the skills, tools, and confidence you need to successfully rent your house are just a mouse-click away.

Click Here For Your Free Guide to Renting Your House

What is a Turnkey Rental Property?

This article won’t do you much good if you have no idea what this “turnkey rental property” idea is I keep talking about.

A “turnkey rental property” (also seen spelled as “turn key” or “turn-key”) is a property that has been freshly rehabbed or redeveloped, has tenants in and paying rent, and property management already set up to manage the property for you. The name suggests the idea that all you have to do as the buyer of the property is turn the key in the door, and it’s up and running with no required effort from you. But to be truthful, I’ve always bought turnkey rental properties and I’ve never even had a key to any of them to turn in the door.

You can buy a property that would fall into the category of turnkey from, say, a real estate agent. Basically any property you can buy that meets the above criteria can be considered turnkey. And really, there are other definitions out there too (so always verify exactly what “turnkey” means to the person trying to sell you a property). For the intents of this article though, I am specifically referring to turnkey rental properties that are sold, typically in bulk, by actual turnkey providers.

These companies go out, find a ton of distressed inventory, fix them all up for you, place tenants, and secure management. This is their job, and turnkeys are all they focus on. I did say they work in bulk, but that doesn’t mean you have to buy in bulk; they just operate with bulk property so they can do everything cheaper. Basically, these companies are glorified flippers. Instead of the usual flipper who flips properties to primary homebuyers, these guys flip properties to investors.

The benefit of turnkey rental properties? For anyone not really wanting to swing hammers or put a lot of time or effort into real estate investing, or someone who is more comfortable relying on other people’s expertise for their investment, or anyone living in a city that isn’t conducive to positive monthly cash flow, these properties are great. Everything is done for you, and you can stay totally hands-off.

Related: Yes, Turnkey Rentals CAN Be a Solid Investment Choice: Here Are the Numbers to Prove It

That’s the short of this “turnkey” concept. Now, let’s delve into how to shop for one. Specifically my focus here is in thinking about what market to start in. Turnkeys (again, referring to turnkey companies providing turnkeys in bulk) exist in several markets across the US, and each market offers something completely different.


Shopping for Turnkey Rental Properties

There are a lot of turnkey providers out there, and they are spread across a lot of markets. Your first challenge is sifting through all of the options so you can then hone in on actual properties. I get asked the question a lot: What markets do I like for turnkeys? I’m going to give you an expanded answer to that question.

When I tell people what markets I like right now or at any particular time, for turnkeys my answer is always based on:

Numbers + Market Fundamentals + Quality of Turnkey Provider

So when I say I like a market for turnkeys, I mean I think the market is good in each of those three items: numbers, market fundamentals, and the quality of the turnkey provider. I’d say oftentimes people forget to consider the latter especially. A market may have fantastic numbers (returns) and great market fundamentals, but if there is no quality turnkey provider there, I don’t recommend it as a market for buying turnkeys. See what I’m saying? A lot of markets out there are awesome, and I would love to buy in them, but I don’t know of any high-quality turnkey providers there, so that keeps me from buying there. There is also the reverse: There may be a super high-quality turnkey provider that I would love to buy from, but I don’t advocate the market that they are in, so that keeps me from buying as well.

Let’s go over each of those three criteria I mentioned.


The point of buying a turnkey rental property is to receive positive monthly cash flow. Turnkeys are not set up to support methods of investing such as investing for appreciation (meaning you don’t get monthly cash flow but are instead relying on the idea of the property appreciating later). In order to receive positive monthly cash flow, there must be supporting price-to-rent ratios in that market. The price-to-rent ratio is telling of whether or not the price you have to pay for a property will allow you to receive cash flow each month (after expenses) given the amount of rent the property can feasibly bring in.

For example, when I bought my first (turnkey) rental property in Atlanta in 2011, the price of the property was $55,000 and the rent it was bringing in each month was/is $975/month. If you do the math on that, that much rent coming in each month easily allows for cash flow after all the expenses are paid. (For help on learning to run the numbers on a rental property, check out: “Rental Property Numbers So Easy You Can Calculate Them on a Napkin.”)

I know of a property in Los Angeles, however, that was purchased for $460,000 and the rental income was $2,250/month. That rental income, if you do the numbers, is not enough to cover the expense of having purchased the property. See the difference? That Atlanta property has a fantastic price-to-rent ratio, and the Los Angeles property does not. If you are out for cash flow, having numbers that support positive monthly cash flow is critical. Where this comes into play with markets is that markets typically either support good price-to-rent ratios or they don’t. Los Angeles, San Francisco, and New York City, for example, do not have good price-to-rent ratios for cash flow. Midwestern cities, for example, typically do.

So if you are out for cash flow, you might shoot for Midwestern cities to start your search. There are others, but that is a good generalization. Note: Just because a market supports good price-to-rent ratios does not mean that all neighborhoods or areas of that market also have good ones. The nicest areas will not. So keep that in mind. The good news is that turnkey providers rarely exist in markets where there are not supportive price-to-rent ratios, so you can usually avoid the stress of wondering whether or not a turnkey property from a turnkey provider will yield positive monthly cash flow or not. If you are shopping for a rental property outside of turnkeys, make sure you consider this point.

Market Fundamentals

I personally am only a fan of growing markets. Meaning, the population is trending upwards, industry and jobs are growing, and there is a general desirability to the market. Turnkeys exist in both growing and what I would deem to be declining markets. This is something you should be aware of. For details on what I look for (and avoid) in markets when shopping for general rental properties, check out: “How to Know if Any Given Real Estate Market is Wise to Invest in (With Real Life Examples!).”

In general, though, the main thing to understand is that a market’s fundamentals can directly affect the success of your investment, and the risk level associated with any particular property is also affected. The last thing to know about the market you choose, not necessarily in terms of the market fundamentals though, is that different markets will have different types of turnkey offerings. Some will offer multifamily properties (MFRs), some will only offer single-family properties (SFRs), some markets will offer higher cash flow with lower purchase prices with properties in more urban-type areas, and some markets will offer nicer properties that are more expensive with slightly lower cash flow. So keep that in mind, too — the types of properties that wet your lips the most may only be in one market or another.


Quality of Turnkey Provider

Here’s the kicker to bring up the rear. As I said before, there may be a market that offers great cash flow and  fantastic fundamentals, but there may just not be a good turnkey provider there. Some markets won’t have any turnkey providers, either because the numbers don’t actually work there, or if they do work there, there may not be enough distressed inventory available to make it worth setting up shop.

Related: How to Use Property Management to Save a Bad Turnkey Investment

Some markets will have turnkey providers, but the quality of that provider — because not all turnkey providers are superb — can make it or break it for me. There are a lot of ins and outs with turnkey providers that lend their hand to major red flags, and despite being in the industry for a handful of years now, I still have to rely on some of my experts to pick out those red flags a lot of times because they may not be that obvious. In thinking of the positives, though, here are a few qualities that might make a turnkey provider really good:

  • Consistently delivering high-quality properties
  • Good communication
  • Transparency
  • Delivering as advertised
  • Solid property managers in place
  • Willingness to work with the buyer if any obstacles pop up
  • No slips in quality consistency

Many turnkey providers out there do not fit this list. I know of some incredible turnkey properties in Atlanta; I even bought one of them, but the seller himself is so amazingly difficult to work with that I would tell a new investor to avoid that company completely because he will likely traumatize a new investor, no kidding.

More common than the jerk seller, though, I would say slips in consistency are the most common issues. Turnkey providers start out great, they offer fantastic properties, and then somewhere in the mix, the quality starts slipping and things begin to go south. Or there are the providers that never intended to actually deliver what was advertised, or what they advertise is not as good as they make it out to be. So quality of turnkey provider is extremely important in my opinion, and I will oftentimes base my buying decisions off who is available to work with. I may really want one market, but in another market the turnkey provider is so off the chain awesome that I end up buying through him instead.

Changing Turnkey Markets

I have a last note about turnkey markets.

Turnkey markets are constantly changing.

Meaning, what was a good turnkey market may not necessarily be a good turnkey market now. Here are the things that can change in a market that may cause this shift:

General Market Shifts

For instance, back in the day, Phoenix was a great market to buy in for cash flow. But so many people came in and bought that it drove the prices up to where now the price-to-rent ratios in Phoenix are not conducive at all to positive monthly cash flow. The entire market did a shift with their numbers.


It happens quite often that a market may just run out of inventory. The turnkey providers will have started sifting and digging for any good property they can find that is left, but eventually it’s just not worth the search anymore. This happened first in Charlotte and then in Dallas.

Turnkey Providers

There is definitely a cycle with turnkey providers — they all start out great, and then at some point most of them are no longer so great. So a market may hang tight and keep producing inventory, but the provider quality flunks out, and that causes me to shift my focus to another market. Birmingham would be a recent example of this.


Maybe the market has stayed strong, inventory still exists, and even the turnkey providers have kept their head on their shoulders. What has happened then sometimes is saturation. So many investors have come in and bought properties that now the market is saturated, meaning there are so many rental properties that now tenants looking to rent have so many properties to choose from that yours begin to struggle. Vacancy can be very costly to a rental property owner.

This happened to me with one of my Atlanta properties. I bought when Atlanta was a great market to buy in for a long time, but after so many people came in and bought, my vacancy periods began increasing because it was getting harder to land tenants. One of my properties that typically would only take 30 days to fill took four months last time I got a new tenant in it.


Other Markets

Maybe the same thing as with saturation — the market has stayed strong, inventory still exists, and even the turnkey providers have kept their head on their shoulders, but the fact is there are just better markets out there. Why stick to a market that has already had its heyday if there are other markets out there that offer higher returns, better purchase prices, and better deals? I group Atlanta and Memphis into this category.

Position in the Growth Cycle

This last point is a significant one. Well, maybe. If you have any desire for appreciation potential with a turnkey rental property, it is critical that you buy when the market is in its infancy stage of its growth cycle. Meaning, the growth boom hasn’t quite happened yet. Now, don’t confuse this with a market that is suggested to have a boom cycle coming, but no proof of it actually happening. But many markets have the fundamentals in place to give solid evidence of an impending boom. That is when you want to buy!

I did this with Atlanta in 2011-2012. The boom hadn’t happened yet, but there was every reason to believe it would happen, so I jumped in. The last property I bought there was in late 2012 and I just refinanced it a couple months ago, so less than 3 years after buying it, and I pocketed $40,000 from appreciation. Boom! Granted, that’s no Los Angeles or San Francisco level of appreciation, but that’s a nice wad of cash to add to my pocket on top of the killer cash flow I get from it every month.

But look at that timeline — clearly Atlanta’s boom happened, and I can tell you it happened around 2013 plus or minus a year. So when I bought in 2011-2012, it was in its infancy stage. Now Atlanta is in the mature phase. That boom already happened. So if you buy there now — because the fundamentals and numbers and, well, not so much the turnkey providers, are still there — you aren’t going to see that kind of boom because it already happened. There are other markets out there, however, who are closer to the infancy stage of the cycle. They may not boom has heavily as Atlanta did, but there is more room for growth than Atlanta has. I also put Memphis in this category.

There you go. A start into shopping for turnkey rental properties, with the emphasis being on how to decide on a turnkey market. Now you know exactly what I consider when I am considering turnkey markets for myself. There are obviously many more details in figuring out market fundamentals and picking out the good turnkey providers from the bad, but my theory has always been to leave that job to the experts — the guys who are really good at that stuff (because they do exist) — and leave the shopping to me.

For any of your turnkey buyers out there, what has your experience been in terms of shifting markets? Have you bought turnkeys in different markets or all in the same one?

Let me know with a comment!

About Author

Ali Boone

Ali Boone is a lifestyle entrepreneur, business consultant, and real estate investor. Ali left her corporate job as an Aerospace Engineer to follow her passion for being her own boss and creating true lifestyle design. She did this through real estate investing, using primarily creative financing to purchase five properties in her first 18 months of investing. Ali’s real estate portfolio started with pre-construction investments in Nicaragua and then moved towards turnkey rental properties in various markets throughout the U.S. With this success, she went on to create her company Hipster Investments, which focuses on turnkey rental properties and offers hands-on support for new investors and those going through the investing process. She’s written nearly 200 articles for BiggerPockets and has been featured in Fox Business, The Motley Fool, and Personal Real Estate Investor Magazine. She still owns her first turnkey rental properties and is a co-owner and the landlord of property local to her in Venice Beach.


  1. Hey Ali,

    Thanks for a really helpful & informational post.

    What would you say is the best way to identify an up & coming market in its infancy stage?

    I can imagine that the basics are identifying markets that have cash flow potential and the right mix of schools, jobs, etc. I’m guessing there could be hundreds of places that meet that criteria in the States. And, much like the stock market, I’m guessing it’s exceedingly difficult to identify the next best investment opportunity before anyone else, and be right. So where do you start, specifically with regards to identifying pre-growth boom markets? Also, wouldn’t a pre-growth boom market imply that turkey companies wouldn’t likely exist there?

    Interesting to hear the lessons you’ve learned from your own experience. Keep posting!


    • Ali Boone

      Good questions Aaron! As far as identifying the markets, honestly I’m not the expert there…but I do know guys who are experts. So I piggyback off of them and chase those markets around. So my answer to your question is–I rely on the guys who know what they are doing and are experts at that kind of identification 🙂

      For your other questions… why would a turnkey provider not be in a pre-boom market? The bigger criteria for turnkey providers are a) markets that allow for cash flow and b) markets with enough distressed inventory to make it worth them setting up shop (i.e. they can be there for awhile without running out of inventory)

      • Aaron Dillon

        Hey Ali,

        Thanks for all the follow up 🙂

        I guess I was assuming a turnkey company wouldn’t pop up in a market that didn’t have an impending boom, since they wouldn’t see that market as an opportunity..? Thanks for the insight!


        • Ali Boone

          Oh yeah, I see what you are saying. Well, it doesn’t completely work like that. There are turnkey providers in stable markets, meaning not a major boom impending. And, well, actually there are turnkey providers in declining markets if I were to say so 🙂 More important than impending booms, they need markets where a) the numbers work and b) there is enough distressed inventory to give them enough to work with for a decent amount of time.

    • Ali Boone

      Sorry Justin, can’t include everything in every article. I disagree about Dallas…Dallas was at impending boom level about 2 years ago. That was moved freakishly fast…unlike a lot of the markets that can take 2-5 years to reach maturity, Dallas hit it within about a year and now prices there are higher than they were before the 2009 crash. Dallas is very much matured out now. Denver is an interesting one. It’s definitely beginning to boom but the problem with that one is before the current impending boom started, price-to-rent ratios weren’t allowing for cash flow, so it’s a bit different than a lot of markets.

      Have you looked at Kansas City? That’s a more infant one right now. For example.

  2. Brenda A.

    Hi, I was expecting a guide on all major markets! New Orleans, for instance is what I consider a major market much like Dallas and Houston were. I am definitely interested in this market and time wise it seems to be a perfect market to be in that infancy stage since Katrina happened 10 years ago and. The rebuilding stage has definitely begun but I don’t know how or where to go to get information on population, industry, job and market growth. Do you have any information on that.

    • Ali Boone

      Sorry Brenda, I don’t. I work with market experts who are the ones who get all the detailed info…I just analyze all the data they find. My recommendation would be to talk to people around the NO market and see what they have to say. I went down there 3 years ago with some investors who were doing a lot of flipping down there and I was checking out everything they are doing. So they were definitely riding the rebuilding bandwagon, but otherwise I don’t know too much about it. I just know the market in general has some quirky features in terms of rebuild potential and future hurricane risks and such. Not sure what the numbers look like either.

      Sorry I didn’t provide a guide going over all the markets!

    • Ali Boone

      Hey Grace! I’ve actually never been into Vegas. I’ve not personally liked it as a turkey market, but it did used to be more popular for it. Not sure if there are turnkey folks there any longer? Prices have been drastically driven up and I’ve never liked the fact that there is only one industry there–entertainment–which is completely dependent on the general economy. Areas I do suggest thought, as of right now–Kansas City, Chicago, Indy, Philly…

  3. Andrew B.

    Thanks for another great and helpful Turnkey article, Ali!

    What are your general thoughts on Palmdale? I saw Home Union had some properties out in that area, which seemed more affordable than most properties in So Cal. Though I did notice that Palmdale is out in the boonies and the area seems heavily weighted on an engineering job market…

    • Ali Boone

      Hey Andrew! Thanks!

      Funny you ask that, I literally just wrote out my opinions on Palmdale in a forum post yesterday. I’ll just copy that here, and then let me know if you have any other questions.

      “I don’t recommend it as a place to invest in rentals because….as a complete side note to the other issues of lack of cash flow in most CA cities and tenant-friendly laws….my perception of Palmdale/Lancaster from when I lived there is this– There are two…categories, if you will…of people living up there. I completely acknowledge the risk for over-generalization here, but it is what it is. There are locals, and there are aerospace people (due to the massive presence of the aerospace industry there). The aerospace people have to be there because of their jobs, regardless of desirability of the area, and they buy houses because of the affordability them (versus renting). That leaves, for renters, the locals. Because of that same affordability, the locals who are left renting are only doing so because they can’t afford to buy a house…which isn’t anything excessive compared to other SoCal cities. So, they can’t afford it. Which puts them into the lower income bracket of renter pools. When you have a pool mostly of lower income, to that level, the risk factor increases greatly for tenant issues. (how’s this all for PC phrasing?! lol) Therefore, I won’t invest up there because the margin of cash flow isn’t high enough to make up for the tenant risk, in my opinion. Tenant problems are bad enough in any state, but in CA they are even worse because of the laws.”

      So, funny you mention being reliant on the engineering jobs….I mentioned just that myself! 🙂

  4. Brad Martinsen

    Hi Ali,

    Nice article. I just bought my first turnkey last summer in Memphis. The company seems pretty good, and so far, it’s been positive cash flow. I’ll probably buy another there in the next few months. After 1-2 more there, I may look elsewhere. When you talk about finding experts on market trends, do you just have friends that you have found networking through BP and other RE circles?

  5. Neil Henderson

    Thanks @AliBoone This article and many of your other articles on Turn-Key investing was very helpful. As a new investor living in a market that doesn’t have good price-to-rent numbers, it’s comforting to see someone doing it successfully. It often seems that TK investing is poo poo’d by a lot of the experienced investor’s here on BP. It’s nice to find someone who’s an advocate.

    • Ali Boone

      Definitely, Neil! Well, and who knows how ‘experienced’ the poo-pooers really are. Maybe, maybe not. I can never figure out why bother bashing the turnkey method…if you don’t like it, then don’t do it. I hate wholesaling but I don’t knock people who do it 🙂 But yep, I’m TK all the way! Wouldn’t change it.

    • Ali Boone

      Hey Gianni! As of this moment right now (because things are always changing), I do think KC is more infant than a lot of markets. It’s harder right now in general to find mega-infant stages because the general RE economy is strong and less on downed cycles, and infant stages will always be stronger in a downed market, but for where everything is right now….KC is a good contender for relative infancy. I believe.

  6. Laura Guy

    Hi Ali. Thank you for the article! And love what you’re up to with lifestyle design through real estate investing.

    What is the best way to find your turnkey providers? If I am interested in Central Florida, for example, is there a site that lists turnkeys in the area?

    • Ali Boone

      Hey Laura! I actually don’t know of any turnkey operators in Central Florida. Typically the turnkey operators set up shop in areas that 1. have enough distressed inventory that will allow them to continuously sell properties (revolving inventory) and 2. have investor-advantaged price-to-rent ratios. Central FL typically falls short with the latter. Can’t say for sure on the former, but I’d imagine inventory isn’t all that readily available there either.

      There are some turnkey outfits in Jacksonville I know but I haven’t dealt with them any because there are other markets with much higher returns. There used to be one around Ft. Myers but I haven’t heard about them in years.

      Best way to find turnkey providers? Shoot me a message 🙂

  7. Vincent Van

    Great post as always!
    I’m new to REI, and have been reading many of your posts on turnkey approach, and think it would be a great fit for me. I live in Los Angeles / Orange County area and rental cash-flow just doesn’t really work here.

    Just wonder what is your thoughts on Kansas City? Can you recommend any turnkey providers there?


    • Ali Boone

      Hey Vincent! Very cool…where in LA are you? I’m in Venice. Yes, my thoughts on KC are very positive right now. Lots of cool things going on there, and I do have a turnkey company I like working with there. PM me or email me and I can send info.

      • Vincent Van

        I live in Westminster now, used to be in San Gabriel valley area, and UCLA 🙂
        I’m a bit overwhelm with infos and different opinions about doing out-of-state for new investor. I sent PM for turnkey company recommendation. Thanks!

    • Ali Boone

      Lots of good things, Martin 🙂 It’s been a pretty good, and popular, one for a few years now with turnkeys and investors. It’s honestly not my favorite of all the market potentials, just because it has been around a long time and is more saturated than others and with more minimal growth potential (in appreciation terms, not population growth). However, it currently has my favorite turnkey provider of all of them. So for that alone, I keep Indy in my sights and as a market I recommend!

    • Ali Boone

      Hi Winston. I don’t know of any areas in MD that cash flow right now. Not saying it’s not possible, I just don’t know of any. I do know of several MD investors buying out-of-state, if that’s any hint…

  8. Mo Takhim

    Hi Ali,

    Amazing article. You mentioned that you have access to expert guys that you leverage to study certain markets. Is this information something you can share or not? I am worry that I might not doing the same analysis as expert and end up in markets that can be problematic and unworthy. Your help is greatly appreciated!

Leave A Reply

Pair a profile with your post!

Create a Free Account


Log In Here