Are Turnkey Rental Properties Actually Profitable for Out-of-State Investors?
Christopher RubioPro Member
Investor · Member since 2024 · 163 posts · 130 votesAre Turnkey Rental Properties Actually Profitable for Out-of-State Investors?
Most Popular Reply
Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes
11moChristopher, just keep in mind that whether you buy turnkey or on your own, always get your own property appraisal and talk to local agents about realistic rents. Never trust someone else's numbers.
24 Replies
- Investor · Toledo-MetroDetroit-Dallas · Member since 2022 · 122 posts · 71 votes1y
Yeah, the numbers have mostly held up. A few surprises here and there (repairs, tenant stuff), but overall it’s been solid once you plan for realistic expenses. Cash flow stayed close to what I expected.
Working with the turnkey provider and PM has been good, but it really comes down to who you pick. I spent time vetting both and stayed involved early on, which made a big difference. Some providers just hand you a property and disappear, so choosing the right team is huge.
I think turnkey makes sense if your goal is to build a portfolio without being hands-on. Once you’ve got a few under your belt, you can always scale into more active projects if that’s your goal. It's definitely good to learn the ropes with turnkey first before diving into other investment types.
- Investor · Member since 2024 · 163 posts · 130 votes1y
Quote from @Account Closed:
Yeah, the numbers have mostly held up. A few surprises here and there (repairs, tenant stuff), but overall it’s been solid once you plan for realistic expenses. Cash flow stayed close to what I expected.
Working with the turnkey provider and PM has been good, but it really comes down to who you pick. I spent time vetting both and stayed involved early on, which made a big difference. Some providers just hand you a property and disappear, so choosing the right team is huge.
I think turnkey makes sense if your goal is to build a portfolio without being hands-on. Once you’ve got a few under your belt, you can always scale into more active projects if that’s your goal. It's definitely good to learn the ropes with turnkey first before diving into other investment types.
@Account Closed
That’s great to hear — sounds like you went about it the right way by really vetting your team and staying involved early on. I can definitely see how that makes or breaks the experience, especially when the provider or PM isn’t as attentive.
I like your point about turnkey being a solid first step before moving into more active strategies. That’s kind of the phase I’m in — trying to learn the ropes and build confidence while keeping the risk manageable.
Do you mind sharing what market your turnkeys are in and how you found a provider and PM you actually trust? I’d love to hear how you might be able to help or what advice you’d give on picking the right team as I start looking at my first property.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1yI just wrote with detail about one at
Quote from @Christopher Rubio:
Hey everyone,
I’m a newer investor exploring out-of-state markets in the $100K–$150K range and trying to figure out the best way to start. I’ve been hearing a lot about turnkey properties — homes that are already renovated, tenant-occupied, and ready to cash flow from day one.
On paper, they sound like a stress-free way to get started (especially if you’re not local), but I’ve also read mixed opinions about whether they really perform as advertised once you factor in management fees, maintenance, and long-term expenses.
For those who’ve bought turnkey rentals:
- Did the numbers hold up after your first year or two?
- How was your experience working with the turnkey provider and property manager?
- Do turnkey properties make sense for building a portfolio, or are they better as a stepping stone to something else (like BRRRR or small multifamily)?
I’d love to hear real experiences — the good and the bad — especially from other out-of-state investors.
Christopher
Using Creative Financing To Buy "Off Market" with "Subject To" and "Wraps" https://www.biggerpockets.com/forums/311/topics/1265821-usin...- Investor · Member since 2024 · 163 posts · 130 votes1y
Quote from @Ken M.:
I just wrote with detail about one atQuote from @Christopher Rubio:
Hey everyone,
I’m a newer investor exploring out-of-state markets in the $100K–$150K range and trying to figure out the best way to start. I’ve been hearing a lot about turnkey properties — homes that are already renovated, tenant-occupied, and ready to cash flow from day one.
On paper, they sound like a stress-free way to get started (especially if you’re not local), but I’ve also read mixed opinions about whether they really perform as advertised once you factor in management fees, maintenance, and long-term expenses.
For those who’ve bought turnkey rentals:
- Did the numbers hold up after your first year or two?
- How was your experience working with the turnkey provider and property manager?
- Do turnkey properties make sense for building a portfolio, or are they better as a stepping stone to something else (like BRRRR or small multifamily)?
I’d love to hear real experiences — the good and the bad — especially from other out-of-state investors.
Christopher
Using Creative Financing To Buy "Off Market" with "Subject To" and "Wraps" https://www.biggerpockets.com/forums/311/topics/1265821-usin...Wow, this was a great breakdown — thank you for sharing it so clearly. I’ve been reading about “Subject To” and “Wrap” strategies, but this is the first time I’ve seen it explained step-by-step with real numbers and reasoning behind each part. It really helps connect the dots on how creative financing can make deals possible when you don’t have a ton of capital upfront.
I especially like your point about doing things through escrow and not trying to hide the transaction — that kind of transparency seems like it saves a lot of headaches later.
Since I’m still learning, I’m curious — how do you typically find these pre-foreclosure opportunities or start those conversations with sellers who are open to creative terms? I’d love to hear how you might be able to help or what advice you’d give someone trying to start small with “Subject To” deals the right way.
- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y
Quote from @Christopher Rubio:
Quote from @Ken M.:
I just wrote with detail about one atQuote from @Christopher Rubio:
Hey everyone,
I’m a newer investor exploring out-of-state markets in the $100K–$150K range and trying to figure out the best way to start. I’ve been hearing a lot about turnkey properties — homes that are already renovated, tenant-occupied, and ready to cash flow from day one.
On paper, they sound like a stress-free way to get started (especially if you’re not local), but I’ve also read mixed opinions about whether they really perform as advertised once you factor in management fees, maintenance, and long-term expenses.
For those who’ve bought turnkey rentals:
- Did the numbers hold up after your first year or two?
- How was your experience working with the turnkey provider and property manager?
- Do turnkey properties make sense for building a portfolio, or are they better as a stepping stone to something else (like BRRRR or small multifamily)?
I’d love to hear real experiences — the good and the bad — especially from other out-of-state investors.
Christopher
Using Creative Financing To Buy "Off Market" with "Subject To" and "Wraps" https://www.biggerpockets.com/forums/311/topics/1265821-usin...Wow, this was a great breakdown — thank you for sharing it so clearly. I’ve been reading about “Subject To” and “Wrap” strategies, but this is the first time I’ve seen it explained step-by-step with real numbers and reasoning behind each part. It really helps connect the dots on how creative financing can make deals possible when you don’t have a ton of capital upfront.
I especially like your point about doing things through escrow and not trying to hide the transaction — that kind of transparency seems like it saves a lot of headaches later.
Since I’m still learning, I’m curious — how do you typically find these pre-foreclosure opportunities or start those conversations with sellers who are open to creative terms? I’d love to hear how you might be able to help or what advice you’d give someone trying to start small with “Subject To” deals the right way.
DM me for the links. BP limits the amount one can talk about strategy and specifics in the Forums.
My profile is https://www.biggerpockets.com/users/kenm286my email is there or when you get there, on the upper right hand of your screen is an icon
click on Message and DM me.
- 1yAshish AcharyaBusiness MemberCPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votes
Great question, and you’re asking all the right things early on.
From a tax angle, turnkey properties can definitely make sense if you want something hands-off, but they usually come with smaller write-offs upfront. Since the property is already renovated and rented, there’s less opportunity for big deductions like rehab costs or bonus depreciation from a cost segregation study.
Where investors sometimes miss out is depreciation planning, the turnkey provider sets everything up, but rarely talks about how to structure ownership or when to group properties for tax purposes. That’s where you can leave money on the table.
If your goal is to build long-term wealth and save on taxes, strategies like BRRRR or small multifamily often give you more control. You can time renovations, leverage cost segregation, and even qualify for active participation if you manage more closely.
Turnkeys are fine for simplicity, but they’re not always the best from a tax efficiency standpoint unless you have other active real estate to offset the income. Happy to connect!
INVESTOR FRIENDLY CPA®4.9242 Reviews- Investor · Get yourself trained before doing something inadvisable. · Member since 2024 · 3k+ posts · 1k+ votes1y
Quote from @Ashish Acharya:
Great question, and you’re asking all the right things early on.
From a tax angle, turnkey properties can definitely make sense if you want something hands-off, but they usually come with smaller write-offs upfront. Since the property is already renovated and rented, there’s less opportunity for big deductions like rehab costs or bonus depreciation from a cost segregation study.
Where investors sometimes miss out is depreciation planning, the turnkey provider sets everything up, but rarely talks about how to structure ownership or when to group properties for tax purposes. That’s where you can leave money on the table.
If your goal is to build long-term wealth and save on taxes, strategies like BRRRR or small multifamily often give you more control. You can time renovations, leverage cost segregation, and even qualify for active participation if you manage more closely.
Turnkeys are fine for simplicity, but they’re not always the best from a tax efficiency standpoint unless you have other active real estate to offset the income. Happy to connect!
Your comment: "the turnkey provider sets everything up" which of course has it advantages when the turnkey provider is professional.
However, the question I have in that scenario, does the buyer have depreciation recovery when they sell, like any other transaction? - Investor · Member since 2024 · 163 posts · 130 votes11mo
Quote from @Ashish Acharya:
Great question, and you’re asking all the right things early on.
From a tax angle, turnkey properties can definitely make sense if you want something hands-off, but they usually come with smaller write-offs upfront. Since the property is already renovated and rented, there’s less opportunity for big deductions like rehab costs or bonus depreciation from a cost segregation study.
Where investors sometimes miss out is depreciation planning, the turnkey provider sets everything up, but rarely talks about how to structure ownership or when to group properties for tax purposes. That’s where you can leave money on the table.
If your goal is to build long-term wealth and save on taxes, strategies like BRRRR or small multifamily often give you more control. You can time renovations, leverage cost segregation, and even qualify for active participation if you manage more closely.
Turnkeys are fine for simplicity, but they’re not always the best from a tax efficiency standpoint unless you have other active real estate to offset the income. Happy to connect!
That’s a great breakdown — I hadn’t really considered how much of the tax benefit gets lost when everything’s already rehabbed and rented. The cost segregation and depreciation angle makes a lot of sense too. I’m definitely leaning toward something that gives me more control long term, even if it takes a little more work upfront.
Would love to connect and learn more about how you structure things for tax efficiency and whether there’s a smart way to balance turnkey simplicity with those advantages. How might you be able to help me get started in the right direction?
- 11moAshish AcharyaBusiness MemberCPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votesWould love to connect! Sent you a message since we can’t discuss details here, check your inbox.
Quote from @Christopher Rubio:
Quote from @Ashish Acharya:
Great question, and you’re asking all the right things early on.
From a tax angle, turnkey properties can definitely make sense if you want something hands-off, but they usually come with smaller write-offs upfront. Since the property is already renovated and rented, there’s less opportunity for big deductions like rehab costs or bonus depreciation from a cost segregation study.
Where investors sometimes miss out is depreciation planning, the turnkey provider sets everything up, but rarely talks about how to structure ownership or when to group properties for tax purposes. That’s where you can leave money on the table.
If your goal is to build long-term wealth and save on taxes, strategies like BRRRR or small multifamily often give you more control. You can time renovations, leverage cost segregation, and even qualify for active participation if you manage more closely.
Turnkeys are fine for simplicity, but they’re not always the best from a tax efficiency standpoint unless you have other active real estate to offset the income. Happy to connect!
That’s a great breakdown — I hadn’t really considered how much of the tax benefit gets lost when everything’s already rehabbed and rented. The cost segregation and depreciation angle makes a lot of sense too. I’m definitely leaning toward something that gives me more control long term, even if it takes a little more work upfront.
Would love to connect and learn more about how you structure things for tax efficiency and whether there’s a smart way to balance turnkey simplicity with those advantages. How might you be able to help me get started in the right direction?
INVESTOR FRIENDLY CPA®4.9242 Reviews - 11moAshish AcharyaBusiness MemberCPA, CFP®, PFS · Sarasota, FL · Member since 2017 · 5k+ posts · 3k+ votesThat’s a tricky question too. Would love to dive into it more off the forum. I think we're already connected, would love to jump on a call with you.
Quote from @Ken M.:
Quote from @Ashish Acharya:
Great question, and you’re asking all the right things early on.
From a tax angle, turnkey properties can definitely make sense if you want something hands-off, but they usually come with smaller write-offs upfront. Since the property is already renovated and rented, there’s less opportunity for big deductions like rehab costs or bonus depreciation from a cost segregation study.
Where investors sometimes miss out is depreciation planning, the turnkey provider sets everything up, but rarely talks about how to structure ownership or when to group properties for tax purposes. That’s where you can leave money on the table.
If your goal is to build long-term wealth and save on taxes, strategies like BRRRR or small multifamily often give you more control. You can time renovations, leverage cost segregation, and even qualify for active participation if you manage more closely.
Turnkeys are fine for simplicity, but they’re not always the best from a tax efficiency standpoint unless you have other active real estate to offset the income. Happy to connect!
Your comment: "the turnkey provider sets everything up" which of course has it advantages when the turnkey provider is professional.
However, the question I have in that scenario, does the buyer have depreciation recovery when they sell, like any other transaction?INVESTOR FRIENDLY CPA®4.9242 Reviews
- Investor · Costa Mesa, CA · Member since 2016 · 1k+ posts · 1k+ votes11mo
Christopher, just keep in mind that whether you buy turnkey or on your own, always get your own property appraisal and talk to local agents about realistic rents. Never trust someone else's numbers.
- Investor · Member since 2024 · 163 posts · 130 votes11mo
Quote from @Eric Gerakos:
Christopher, just keep in mind that whether you buy turnkey or on your own, always get your own property appraisal and talk to local agents about realistic rents. Never trust someone else's numbers.
@Eric Gerakos noted, thanks Eric. Appreciate this.
Hey Christopher! Turnkeys can actually be a solid option, especially if you’re working with the right team and market. The turnkeys we have in Detroit have been performing really well, steady cash flow, low hassle, and they fit right into your buy box for long-term rentals.
We also work with several out-of-state investors, and what’s been great is seeing how consistent the returns are and how it’s helped our investors grow their portfolios with confidence. It’s also built strong relationships between our team and investors since everything’s transparent and runs smoothly.If you’d like, I’d be happy to share a bit more about how they’ve been performing in that market and show you some of our available properties.
- Investor · Member since 2024 · 163 posts · 130 votes11mo
Quote from @Al Bazzy:
Hey Christopher! Turnkeys can actually be a solid option, especially if you’re working with the right team and market. The turnkeys we have in Detroit have been performing really well, steady cash flow, low hassle, and they fit right into your buy box for long-term rentals.
We also work with several out-of-state investors, and what’s been great is seeing how consistent the returns are and how it’s helped our investors grow their portfolios with confidence. It’s also built strong relationships between our team and investors since everything’s transparent and runs smoothly.If you’d like, I’d be happy to share a bit more about how they’ve been performing in that market and show you some of our available properties.
That sounds really promising — I’ve actually been looking closely at markets like Detroit since they seem to have that good balance of price and rental demand.
I like the idea of something more hands-off to start, especially if the numbers are consistent and the management side runs smoothly. I’d definitely be interested in hearing more about how your Detroit properties are performing and what kind of returns you’re seeing right now.
Also, are most of your investors buying single-family or small multis in that market? I’d love to learn what’s working best there and how you think someone new like me could get started.
- Homeowner · Fitchburg, MA · Member since 2024 · 7 posts · 5 votes11mo
Here are some crucial tips
1. Make sure the place you are buying is occupied and the tennant has been actively paying their rent. If not you are finding yourself in a crap shoot and the seller holds all the cards.
A. The seller sells you a fixer upper and projects what the cost will be once done and sells you that house based on that projection. However you pay more for the house than what its worth.
B. You wait months if not years before you get a good reliable tenant in.
C. The seller can't project you'll be making the top of the market rents when you will know exactly what you will be making.
D. Realize the management company has fees for this and fees for that and fees fees fees fees.
Feel free to contact me.
- Investor · Member since 2024 · 163 posts · 130 votes11mo
Quote from @Gail L boucher:
Here are some crucial tips
1. Make sure the place you are buying is occupied and the tennant has been actively paying their rent. If not you are finding yourself in a crap shoot and the seller holds all the cards.
A. The seller sells you a fixer upper and projects what the cost will be once done and sells you that house based on that projection. However you pay more for the house than what its worth.
B. You wait months if not years before you get a good reliable tenant in.
C. The seller can't project you'll be making the top of the market rents when you will know exactly what you will be making.
D. Realize the management company has fees for this and fees for that and fees fees fees fees.
Feel free to contact me.
Those are some solid points — especially the part about “fees, fees, fees!” 😂 It’s wild how those can quietly eat into cash flow if you’re not paying attention. I totally agree that verifying rent history upfront and avoiding “projected” deals saves a lot of headaches.
I appreciate you sharing that breakdown — super helpful. Out of curiosity, which markets have you found are the most transparent or investor-friendly when it comes to occupied rentals?
- 11moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
At least 50% of turnkeys are currently questionable.
5+ years ago, values & rents were increasing, so it was easy for the turnkey flippers to deliver.
Now, values are up, but not increasing that fast, same with rents.
Turnkey flippers are getting their profits squeezed with:
Higher purchase prices
Higher material costs
Higher labor costs
Longer holding periodsSo, many cut corners or prey on cash buyers to overcharge them, using hyped ROI numbers.
Even the turnkey, build-to-rent investors are finding their properties are performing as expected. Many took teaser 2-1 buydown mortgages where the rates/payments are increasing, but the rents are not keeping pace.
So, do your own due diligence!
Logical Property Management4.9469 Reviews- Investor · Member since 2024 · 163 posts · 130 votes11mo
Quote from @Drew Sygit:
At least 50% of turnkeys are currently questionable.
5+ years ago, values & rents were increasing, so it was easy for the turnkey flippers to deliver.
Now, values are up, but not increasing that fast, same with rents.
Turnkey flippers are getting their profits squeezed with:
Higher purchase prices
Higher material costs
Higher labor costs
Longer holding periodsSo, many cut corners or prey on cash buyers to overcharge them, using hyped ROI numbers.
Even the turnkey, build-to-rent investors are finding their properties are performing as expected. Many took teaser 2-1 buydown mortgages where the rates/payments are increasing, but the rents are not keeping pace.
So, do your own due diligence!
Thanks for laying it out that plainly — “at least 50% questionable” is the kind of stat my cautious brain needed to hear 😂. It makes sense though: if the turnkey operator’s margins are getting squeezed, the investor’s probably getting the “optimized” version of the deal, not the real one.
I really like your point about the 2-1 buydowns too — looks great in the marketing, but year 3 shows up like, “Surprise, here’s your real payment,” and rent didn’t get the memo.
I’ll definitely keep digging into actual leases, rent rolls, PM agreements, and not just the glossy pro forma. Thanks for the warning.
Quick question for you: when you vet a turnkey now, what’s the ONE thing you look at first to decide if it’s even worth continuing (seller reputation, PM quality, neighborhood, or the actual rent vs. pro forma)?
- 11moBasit SiddiqiBusiness MemberAccountant · New York, NY · Member since 2015 · 8k+ posts · 3k+ votes
The less work that you do normally results in less of a return that you should expect.
I think people who purchased turn-key rentals from 2010 to 2019 were able to make it work. They likely got cash-flow and appreciation.
I think it is much harder now but likely still do-able.
Basit Siddiqi CPA4.880 Reviews- Investor · Member since 2024 · 163 posts · 130 votes11mo
Quote from @Basit Siddiqi:
The less work that you do normally results in less of a return that you should expect.
I think people who purchased turn-key rentals from 2010 to 2019 were able to make it work. They likely got cash-flow and appreciation.
I think it is much harder now but likely still do-able.Haha, fair point — the “less work = less return” rule might be the only one that’s never broken in real estate 😅. You’re right though, those 2010–2019 turnkey investors hit the sweet spot with cheap inventory, low rates, and rising rents. Definitely a different game now.
Still, for newer investors who don’t have time to swing hammers or live near their properties, I guess a thinner return might be worth the trade for peace of mind.
Curious — if someone were starting today, would you still say turnkey is worth considering just to get experience, or would you tell them to wait and hunt for a light value-add instead?
- Investor · Dallas, TX · Member since 2017 · 71 posts · 44 votes11mo
Quote from @Christopher Rubio:
Hey everyone,
I’m a newer investor exploring out-of-state markets in the $100K–$150K range and trying to figure out the best way to start. I’ve been hearing a lot about turnkey properties — homes that are already renovated, tenant-occupied, and ready to cash flow from day one.
On paper, they sound like a stress-free way to get started (especially if you’re not local), but I’ve also read mixed opinions about whether they really perform as advertised once you factor in management fees, maintenance, and long-term expenses.
For those who’ve bought turnkey rentals:
- Did the numbers hold up after your first year or two?
- How was your experience working with the turnkey provider and property manager?
- Do turnkey properties make sense for building a portfolio, or are they better as a stepping stone to something else (like BRRRR or small multifamily)?
I’d love to hear real experiences — the good and the bad — especially from other out-of-state investors.
Christopher
In my opinion the first question should be how involved do you want to be and what are your investing objectives. Some investors buy turnkey rentals to diversify their cash portfolio while others just want a tax break. Some are seeking the most cashflow they can while others just want their mortgage to get paid down. Some investors have lots of time and power tools on their hands while others just want to review a quarterly statement. Like everything, turn key deals have their pros and cons. Just need to decide what is important to you and come up with a solid game plan.
- Investor · Member since 2024 · 163 posts · 130 votes11mo
Quote from @Dennis Fernandez:
Quote from @Christopher Rubio:
Hey everyone,
I’m a newer investor exploring out-of-state markets in the $100K–$150K range and trying to figure out the best way to start. I’ve been hearing a lot about turnkey properties — homes that are already renovated, tenant-occupied, and ready to cash flow from day one.
On paper, they sound like a stress-free way to get started (especially if you’re not local), but I’ve also read mixed opinions about whether they really perform as advertised once you factor in management fees, maintenance, and long-term expenses.
For those who’ve bought turnkey rentals:
- Did the numbers hold up after your first year or two?
- How was your experience working with the turnkey provider and property manager?
- Do turnkey properties make sense for building a portfolio, or are they better as a stepping stone to something else (like BRRRR or small multifamily)?
I’d love to hear real experiences — the good and the bad — especially from other out-of-state investors.
Christopher
In my opinion the first question should be how involved do you want to be and what are your investing objectives. Some investors buy turnkey rentals to diversify their cash portfolio while others just want a tax break. Some are seeking the most cashflow they can while others just want their mortgage to get paid down. Some investors have lots of time and power tools on their hands while others just want to review a quarterly statement. Like everything, turn key deals have their pros and cons. Just need to decide what is important to you and come up with a solid game plan.
That’s a great perspective — really boils it down to knowing yourself before chasing a strategy. 😂 It’s funny how many investors want “passive income” until they’re knee-deep in a water heater replacement.
You make a solid point about matching the level of involvement to your goals — that’s where most people trip up. For you personally, do you lean more toward the hands-off, turnkey style, or do you still enjoy rolling up your sleeves and being more active in the process?
Hey Christopher! Turnkey properties can be a solid option for out-of-state investors, especially if you focus on markets with strong cash flow and good neighborhoods. We’ve had several investors come back to purchase multiple properties because the returns are strong. The turnkey homes we work with are fully renovated and ready to go, making it easier to start building a portfolio without worrying about rehabs. Markets like Detroit, for example, have been great for this. Affordable entry points, solid neighborhoods, and steady rental demand make the numbers work well for out-of-state buyers.
Feel free to reach out if you’d like to learn more about turnkeys.
- Investor · Dallas, TX · Member since 2017 · 71 posts · 44 votes10mo
@Christopher Rubio
Oh yes, I am very active in the business.Actually work in the acquisitions department at REI Nation, one of the largest turn-key provider.
If you do end up going the turn-key route look into our company.
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