Rent to Retirement: Is it too good to be true?

Question

Hello,

I am new to the investing world and have been listening to the podcasts. I keep hearing about the rent to retirement company so I watched their online video. It is very intriguing to me but sounds to good to be true. Is anyone using this? If so, how long have you been using it? What do you like or don't like about it? I want to schedule a consultation with them to find out more and how much it costs but thought I would get some opinions here first. Thanks for your help!

Tiffany McKinney

Greg Scott · Answer

It wouldn't hurt to set up a meeting with them but don't commit to anything yet.

There are many companies like them out there.  Collectively, they are known as "Turnkey" rental providers.  Some specialize in specific cities. Others work with rehabbers across the country so you have some selection on location.

Turnkey rentals are an easy way to get going, but the returns are typically not as good as if you found and managed the rehab on your own.  Cashflow is minimal at first, usually enough to pay for the occasional repair and you are paying close to retail price.  The main play with turnkey rentals is appreciation and paying your loan down over time.  In the long run, you should see cashflow go up but you probably aren't going to retire off cashflow in the early years, even if you bought a coupled dozen properties.

So, if you want to dip your toe in the water the easy way, start with a turnkey rental.  I did. Just do not be surprised if the returns are not as high as you hear others get in real estate.

Zach Lemaster · Answer

@Tiffany McKinney Thanks for the interest in my company.  We have been on BP for about a decade now and have thousands of reviews from many past clients.  I've posted some of those links below to help your research.  We are proud of the 253 5-star reviews we have on BP, which we feel like we've earned.  Please note that we focus on new construction properties mainly, which is different than the traditional "turnkey" model.  We've found new construction homes to offer more predictable returns, better tenant quality, higher appreciation in values and rents long term, etc.  However, price points can be a bit higher than say a 1950 rehabbed home.  Just depends what you are looking for.  I highly recommend you set up a call with our team to learn more and answer all your questions.

@Greg Scott had some great perspective on when TK may make sense based on our goals, experience level and how involved you want to be with your investment properties.  I recommend thinking on these topics to determine the best way to get started investing.  Just keep in mind that even though this is "turnkey," you are still real estate.  That means you may have to deal with tenant turns, some vacancy, some variance in rents, etc.  While mngt is in place to handle these things for you, all real estate investments come with things from time to time.  However, this is a great way to access markets all across the country that offer decent returns to acquire long term hold properties.  Please do reach out with any questions you have at any point of time as we are here to assist however we can.

-Zach Lemaster - CEO Rent To Retirement

Here are some past threads that may help your research:

https://www.biggerpockets.com/users/ZacharyCole/references

https://www.biggerpockets.com/forums/92/topics/765347-rent-to-retirement-review

https://www.biggerpockets.com/forums/92/topics/1116050-a-huge-win-with-cori-from-rent-to-retirement

https://www.biggerpockets.com/forums/850/topics/895660-my-first-investment-property-an-out-of-state-deal

https://www.biggerpockets.com/forums/88/topics/1047543-big-profits-from-new-construction-sfr-build-in-cape-coral-fl

https://www.biggerpockets.com/forums/92/topics/983659-first-investment-property-with-rent-to-retirement?

https://www.biggerpockets.com/forums/12/topics/1122318-quality-turnkey-companies?highlight_post=6413855&page=1

https://www.biggerpockets.com/co/RentToRetirement

https://www.biggerpockets.com/forums/92/topics/929410-rent-to-retirement-updates?highlight_post=5508807&page=1#p5508807

https://www.biggerpockets.com/forums/92/topics/893621-rent-to-retirement-review?highlight_post=5222888&page=1#p5222888

https://www.biggerpockets.com/forums/311/topics/915728-experience-with-rent-to-retirement-turnkey?page=1#p5345200

Tiffany McKinney · Answer

Appreciate the advice! Thank you!