{"id":175018,"date":"2024-07-05T11:53:27","date_gmt":"2024-07-05T17:53:27","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=175018"},"modified":"2024-07-27T15:10:48","modified_gmt":"2024-07-27T21:10:48","slug":"tips-for-managing-a-long-distance-turnkey-rental-property","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/tips-for-managing-a-long-distance-turnkey-rental-property","title":{"rendered":"4 Tips for Managing Long-Distance Turnkey Rentals Without Cutting Corners"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC5788867831\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><em>This article is presented by<\/em>&nbsp;<em><a href=\"https:\/\/www.renttoretirement.com\/\" target=\"_blank\" rel=\"noreferrer noopener\">Rent to Retirement<\/a>. Read our&nbsp;<a href=\"https:\/\/www.biggerpockets.com\/blog\/editorial-blog-guidelines\" target=\"_blank\" rel=\"noreferrer noopener\">editorial guidelines<\/a>&nbsp;for more information.<\/em><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Turnkey property investing can be a great option when you are just starting out on your real estate investing journey or when you want to cast a wider net with your investments beyond your local area. When done right, turnkey investment can be a part of a long-term real estate portfolio-building strategy.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">However, with turnkey investing, the same things that make it an attractive investment formula are also those that can make it challenging. The most significant challenge is dealing with potential issues that can arise from investing in properties long distance. The one question most people ask when they consider turnkey property investing is: \u201cHow do I confidently invest from a distance and still make sure my property performs well if I am not there to oversee it directly?\u201d<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The short answer is that you need to develop a system for overseeing your turnkey investments and stick with it. Here, we take a detailed look at the steps to create this systematic approach.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">1. Understand the Differences in Markets&nbsp;&nbsp;<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Let\u2019s start <\/span><span data-preserver-spaces=\"true\">out<\/span><span data-preserver-spaces=\"true\"> by naming the one thing you should <\/span><em><span data-preserver-spaces=\"true\">not<\/span><\/em><span data-preserver-spaces=\"true\"> do if you\u2019re considering turnkey investing: automatically investing in a location because you\u2019ve heard it\u2019s a hot market. <\/span><span data-preserver-spaces=\"true\">It\u2019s true that a cursory glance at real estate news will<\/span><span data-preserver-spaces=\"true\"> give you a couple of <\/span><span data-preserver-spaces=\"true\">locations<\/span><span data-preserver-spaces=\"true\"> that are labeled hot because they\u2019re experiencing a home price boom\/population boom. However, these media-prominent options should never become your turnkey investment destinations by default.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Let\u2019s take Florida as an example. Yes, it is a popular area with a burgeoning population. <\/span><span data-preserver-spaces=\"true\">But it <\/span><span data-preserver-spaces=\"true\">also is in the midst of<\/span><span data-preserver-spaces=\"true\"> a major housing crisis, with surging home insurance costs and stagnating markets in some regions.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">If you\u2019re attracted to <\/span><span data-preserver-spaces=\"true\">the idea of<\/span><span data-preserver-spaces=\"true\"> investing in an area with a growing, younger population, you may be better off looking into Midwestern cities like Cleveland. Your goals and strategy as an investor should always come first; you then find locations to invest based on your <\/span><span data-preserver-spaces=\"true\">investment<\/span><span data-preserver-spaces=\"true\"> strategy, never the other way around.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The U.S. is a remarkably diverse investment space, with <\/span><span data-preserver-spaces=\"true\">great<\/span><span data-preserver-spaces=\"true\"> variations between regions and localities. <\/span><span data-preserver-spaces=\"true\">You need to do<\/span><span data-preserver-spaces=\"true\"> your research beyond price points and the overall popularity of a potential investment destination. <\/span><span data-preserver-spaces=\"true\">You\u2019ll need to<\/span><span data-preserver-spaces=\"true\"> educate yourself on everything from local laws to appreciation rates, taxes, and <\/span><span data-preserver-spaces=\"true\">local<\/span><span data-preserver-spaces=\"true\"> economic performance.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">For example, you may not want to end up sinking all your beginner investor money into a property in an area populated primarily by retirees with a stagnant seasonal economy that relies on summer tourism\u2014unless<\/span><span data-preserver-spaces=\"true\">, of course,<\/span><span data-preserver-spaces=\"true\"> you\u2019re looking into vacation rentals.<\/span><span data-preserver-spaces=\"true\"> It <\/span><span data-preserver-spaces=\"true\">really<\/span><span data-preserver-spaces=\"true\"> all depends on what your goals are.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">This thorough approach to vetting potential geographic locations as turnkey investment opportunities should apply to <\/span><span data-preserver-spaces=\"true\">your selection of<\/span><span data-preserver-spaces=\"true\"> a turnkey investment company. With turnkeys, the investment company is much more than just <\/span><span data-preserver-spaces=\"true\">a middleman<\/span><span data-preserver-spaces=\"true\">. The company\u2019s strategy and expertise can make or break your success as a turnkey investor because it will <\/span><span data-preserver-spaces=\"true\">be the one presenting<\/span><span data-preserver-spaces=\"true\"> you with investment opportunities.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Our advice is to look<\/span><span data-preserver-spaces=\"true\"> for a company that works in multiple investment markets.<\/span><span data-preserver-spaces=\"true\"> While other forms of real estate investments may work better with a laser focus on just one area, this isn\u2019t the best way to <\/span><span data-preserver-spaces=\"true\">achieve success<\/span><span data-preserver-spaces=\"true\"> in turnkey investing. A broad insight into multiple geographic locations is what pays off here.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The turnkey company should help you work toward your goals as an investor and offer you locations to invest in that will <\/span><span data-preserver-spaces=\"true\">truly<\/span><span data-preserver-spaces=\"true\"> fit those goals. You may <\/span><span data-preserver-spaces=\"true\">end up investing<\/span><span data-preserver-spaces=\"true\"> in a location halfway across the country you\u2019ve never even considered, but that\u2019s the whole point.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">We recommend turnkey companies that work in at least five different markets to give you more perspective in market decisions and allow for more diversification over time.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">2. Don&#8217;t Cut Corners on Due Diligence&nbsp;&nbsp;<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Turnkey investing is attractive to many beginner investors because it has a reputation for being a passive form of investing. That is true <\/span><span data-preserver-spaces=\"true\">in the sense that<\/span><span data-preserver-spaces=\"true\"> you won\u2019t need to renovate a home before renting it out, and in many cases, won\u2019t even need to look for tenants, as the turnkey company can do that for you.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">What the company cannot do for you, though, is your due diligence on the property before you\u2019ve signed the contract. <\/span><span data-preserver-spaces=\"true\">In that sense, <\/span><span data-preserver-spaces=\"true\">turnkey properties should be treated<\/span> <span data-preserver-spaces=\"true\">in <\/span><span data-preserver-spaces=\"true\">exactly<\/span><span data-preserver-spaces=\"true\"> the same way as<\/span><span data-preserver-spaces=\"true\"> any other type of real estate investment.<\/span><span data-preserver-spaces=\"true\"> Or think of it this way: The passive leg of the journey begins only<\/span><em><span data-preserver-spaces=\"true\"> after<\/span><\/em><span data-preserver-spaces=\"true\"> you\u2019ve done all your research and due diligence.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Once the turnkey company has found a suitable property <\/span><span data-preserver-spaces=\"true\">for you<\/span><span data-preserver-spaces=\"true\">, they will send you an investment analysis or pro forma of projected rental information. It is your job to verify everything in that document.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">As a bare minimum, you will need to:<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Make sure any rent quotes are in line<\/span><span data-preserver-spaces=\"true\"> with comparable properties in the area.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Obtain your <\/span><span data-preserver-spaces=\"true\">own<\/span><span data-preserver-spaces=\"true\"> insurance quotes to make sure<\/span><span data-preserver-spaces=\"true\"> you won\u2019t be overpaying on home insurance.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Get lender quotes for financing: These will be required to close the deal <\/span><span data-preserver-spaces=\"true\">in any case<\/span><span data-preserver-spaces=\"true\">.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Get a third-party property inspection and appraisal report: These will tell you if the pricing is in line with what it should be and if the <\/span><span data-preserver-spaces=\"true\">condition of the property<\/span><span data-preserver-spaces=\"true\"> is as advertised before you close.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> may look like a daunting list, but <\/span><span data-preserver-spaces=\"true\">it\u2019s <\/span><span data-preserver-spaces=\"true\">very important<\/span><span data-preserver-spaces=\"true\"> to obtain all this information<\/span> <em><span data-preserver-spaces=\"true\">before<\/span><\/em><span data-preserver-spaces=\"true\"> you close on the turnkey property.<\/span><span data-preserver-spaces=\"true\"> The convenience of turnkey really won\u2019t be very convenient if you discover further down the line that there were undisclosed issues with the property, or you\u2019re overpaying on insurance, or your cash flow is too low because the agreed-upon rents aren\u2019t in line with what they should be. These are potentially huge issues you\u2019ll have <\/span><span data-preserver-spaces=\"true\">a hard time<\/span><span data-preserver-spaces=\"true\"> resolving long distance.&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\">3. Spend Time Researching and Interviewing Turnkey Companies<\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">We\u2019ve already touched on the fact that the quality and experience of the turnkey company <\/span><span data-preserver-spaces=\"true\">really<\/span><span data-preserver-spaces=\"true\"> matters to your success as an investor. You will be trusting this company with crucial investment decisions, after all. But vetting your turnkey company doesn\u2019t stop <\/span><span data-preserver-spaces=\"true\">at<\/span><span data-preserver-spaces=\"true\"> researching how many markets it operates in.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Turnkey companies vary wildly in the type and extent of the services they provide. There is no standard definition of how much a turnkey company will do for you; <\/span><span data-preserver-spaces=\"true\">they\u2019re not regulated<\/span><span data-preserver-spaces=\"true\"> in any way, so it\u2019s up to you to ask the right questions to determine if they\u2019ll cover your needs.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Get as much detailed information as possible before <\/span><span data-preserver-spaces=\"true\">deciding to work<\/span><span data-preserver-spaces=\"true\"> with a turnkey company. <\/span><span data-preserver-spaces=\"true\">For example, <\/span><span data-preserver-spaces=\"true\">you may want to<\/span><span data-preserver-spaces=\"true\"> ask whose responsibility it will be to find tenants, and whether the company works with <\/span><span data-preserver-spaces=\"true\">properties that <\/span><span data-preserver-spaces=\"true\">are already occupied<\/span><span data-preserver-spaces=\"true\">.<\/span> <span data-preserver-spaces=\"true\">You should also get<\/span><span data-preserver-spaces=\"true\"> a detailed breakdown of what types of situations (e.g., emergencies, disputes, evictions) the company will manage and how.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Remember: When an issue eventually arises, you won\u2019t be able to <\/span><span data-preserver-spaces=\"true\">easily<\/span><span data-preserver-spaces=\"true\"> get there as a long-distance investor, so you must <\/span><span data-preserver-spaces=\"true\">make sure<\/span><span data-preserver-spaces=\"true\"> the company has the resources and experience to handle all kinds of potential issues.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Another thing you\u2019ll need to determine is how committed the turnkey company is to growing your long-term success as an investor. Again, although turnkey investing is attractive because you can get into it quickly, it\u2019s still a long-term project.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">The best turnkey companies offer <\/span><span data-preserver-spaces=\"true\">a variety of<\/span><span data-preserver-spaces=\"true\"> resources to help <\/span><span data-preserver-spaces=\"true\">an investor<\/span><span data-preserver-spaces=\"true\"> grow their portfolio over time.<\/span><span data-preserver-spaces=\"true\"> These <\/span><span data-preserver-spaces=\"true\">will range from<\/span><span data-preserver-spaces=\"true\"> simple tools like online investment calculators to in-depth market data reports, individual coaching, and educational courses.&nbsp;<\/span><\/p>\n\n\n\n<p><a class=\"editor-rtfLink\" href=\"https:\/\/www.renttoretirement.com\/\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">Rent to Retirement<\/span><\/a><span data-preserver-spaces=\"true\">, for example, has an Academy program <\/span><span data-preserver-spaces=\"true\">that offers educational resources for investors<\/span><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\"> These resources are based on real-life investor expertise and can help <\/span><span data-preserver-spaces=\"true\">you<\/span><span data-preserver-spaces=\"true\"> avoid common beginner investor mistakes. <\/span><span data-preserver-spaces=\"true\">You\u2019ll also <\/span><span data-preserver-spaces=\"true\">be building<\/span><span data-preserver-spaces=\"true\"> a long-term relationship with your turnkey company, <\/span><span data-preserver-spaces=\"true\">which will yield<\/span><span data-preserver-spaces=\"true\"> better long-term results.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">4. Leverage Your Turnkey Company to Build Your Team<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">One<\/span><span data-preserver-spaces=\"true\"> of the more daunting prospects for a beginner investor <\/span><span data-preserver-spaces=\"true\">is building a team<\/span><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\"> Networking isn\u2019t always easy, but it\u2019s <\/span><span data-preserver-spaces=\"true\">especially difficult<\/span><span data-preserver-spaces=\"true\"> when investing long distance. How do you find a reputable lender, insurance provider, or accountant when you are hundreds or <\/span><span data-preserver-spaces=\"true\">even<\/span><span data-preserver-spaces=\"true\"> thousands of miles away from your investment location?<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Building an entire team on your own without local knowledge is a challenge, and that\u2019s another area where an experienced turnkey company can <\/span><span data-preserver-spaces=\"true\">really<\/span><span data-preserver-spaces=\"true\"> make a difference. <\/span><span data-preserver-spaces=\"true\">By using<\/span><span data-preserver-spaces=\"true\"> a reputable turnkey company like Rent to Retirement, you\u2019ll instantly tap into an established network of respected property professionals who will help you manage every aspect of your investment.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Using a turnkey company to leverage its team-building prowess works in your favor because access to an expertly built, well-coordinated team is much more effective than trying to string one together from disparate individuals you\u2019ve never met.&nbsp;&nbsp;<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">These are the fundamentals of developing a fail-safe, systemic approach to turnkey property investing. As we\u2019ve seen, there are several challenges that come with investing long distances, but they can all be overcome by working with a dedicated, experienced turnkey company. There is a lot of research you\u2019ll need to do at the outset, but once you\u2019ve done it and found the best turnkey company for your goals, your turnkey journey should be smooth sailing.<\/span><\/p>\n\n\n\n<div class=\"wp-block-group border border-gray-200 p-6 rounded-md has-slate-50-background-color has-background\"><div class=\"wp-block-group__inner-container is-layout-flow wp-block-group-is-layout-flow\">\n    \n  <div \n    id=\"segemnt-view-event-block_624f52525847f\" \n    class=\"  \"\n    x-intersect:enter.once=\"\n      analytics.track('DoorLoop Blog Sponsor View', {\n        referrer: 'https:\/\/www.biggerpockets.com\/blog\/tips-for-managing-a-long-distance-turnkey-rental-property',\n              })\n    \">\n    \n  <\/div>\n  \n\n\n<h3 class=\"wp-block-heading has-text-align-left mt-0\"><strong>This article is presented by Rent To Retirement<\/strong><\/h3>\n\n\n\n<figure class=\"wp-block-image size-full is-resized\"><img loading=\"lazy\" decoding=\"async\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2023\/03\/rtr.png\" alt=\"\" class=\"wp-image-147742\" style=\"width:294px;height:207px\" width=\"294\" height=\"207\" title=\"\"><\/figure>\n\n\n\n<p>Rent To Retirement is the Nation&#8217;s leading Turnkey Investment Company offering passive income rental properties in the best markets throughout the US to maximize Cash Flow &amp; Appreciation! Rent To Retirement is your partner in achieving financial independence &amp; early retirement through real estate investing. Invest in the best markets today with a comprehensive team that handles everything for you!<\/p>\n\n\n\n<div id=button-custom-event-block_63c9a33918e17 class='button-custom-event'>\n      <a href=\"https:\/\/renttoretirement.com\/\" x-on:click=\"window.analytics.track(&#039;Sponsored Blog CTA Click&#039;, {\n      referrer: &#039;https:\/\/www.biggerpockets.com\/blog\/tips-for-managing-a-long-distance-turnkey-rental-property&#039;,\n    });\" class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\" rel=\"noopener\">Learn More About Rent To Retirement<\/a>\n  <\/div>\n\n\n\n<div class=\"wp-block-buttons is-layout-flex wp-block-buttons-is-layout-flex\"><\/div>\n<\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>Taking the easy way out is generally bad practice. Manage your long-distance rentals this way instead.<\/p>\n","protected":false},"author":613655,"featured_media":175009,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7394,7119],"tags":[],"class_list":["post-175018","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-single-family-real-estate-investing","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/175018","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613655"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=175018"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/175018\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/175009"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=175018"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=175018"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=175018"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}