Turnkey Rental Income Properties

13 Replies

Anyone have experience buying turnkey rental properties?  Are they honest properties and can they save time from flipping a property for rental income?  Any and all info on these properties is helpful.  I'm looking to get started in investing but new at it and short on funds.  Thanks in advance

As with anything it depends on the company/individual you are dealing with but there are definitely some good turnkey properties out there.  Stick with major metro areas in the southeast.  This is one area where the big hedge funds are still buying rentals and there is a good reason for it. Good yields with nice equity gain potential in the right areas makes for a solid investment. 

Generally, turnkey properties are more expensive than the DIY route.  (Think about how buying a pre-cooked rotisserie chicken in the deli is more expensive than buying a raw chicken and some spices and doing it yourself.)

Dawn Anastasi, Core Properties, LLC | http://www.coreprop.biz | Podcast Guest on Show #29

Originally posted by @Dawn Anastasi:

Generally, turnkey properties are more expensive than the DIY route.  (Think about how buying a pre-cooked rotisserie chicken in the deli is more expensive than buying a raw chicken and some spices and doing it yourself.)

 But sometimes not having to clean the oven, or listen to the starving 3-yr old, is a very attractive option. ;-)

Medium greenapartmenthires 1024x1024Roy N., Louer Louer Ltd. | 1.506.471.4126

Thank you all for the advice.  I'm learning as much as possible and looking at the best way to get involved.  The ideal situation would be to shadow a  mentor.  I"m working on that.

I've always only bought turnkeys and yes and yes are the answers to your questions. The first one of course is a yes after you do due diligence on the company you are working with, there have been misleading turnkey companies in the past, but there are a lot of good ones out there.

Medium hipsterinvestment logo black300dpiAli Boone, Hipster Investments | [email protected] | 310‑957‑2101 | https://goo.gl/x52ZKJ

Check out these folks... http://www.noradarealestate.com/  They seem to be a legit outfit and I have been having conversations with them for quite some time. Very transparent.

No company avatar mediumJonathan Godes MBA, Janac Financing | [email protected] | 9703794248

At best a turnkey property will be an OK deal.  Priced at about retail, aimed at far away investors who will evaluate it based on where they live not where it is.  At worst you will get a property that's overpriced, over hyped as far as the true rent, and that has been given a cosmetic rehab that will result in never ending maintenance.  I won't say there are no good turnkey deals.  I have looked at a few that are OK.  I will say there are no great turnkey deals.  Too many fingers in the pot.  And I will say there are many terrible turnkey properties being offered.  There are still many misleading turnkey companies out there.

You MUST do your own evaluation.  Trust NOTHING the turnkey seller tells you.  Verify prices and rents on your own.  Inspect the property carefully.  Drive the neighborhood.  Talk to other agents and property managers in the same area.

Jon Holdman, Flying Phoenix LLC

I have found most experienced real estate investors never buy turnkeys from a " turnkey company" for all the reasons Jon mentioned. Your role as an investor is finding value and creating more value and that is not possible with most turnkey companies. There is no meat left on the bone. You pay high retail for turnkeys and that is not wise investing as the pros see it. That does not mean you would not buy a ready made rental, just normally not through a retailer of turnkeys whos primary business is to make profits from investors vs making money for investors as a secondary concern. You want that as a primary concern when you invest in business or real estate.

I agree with @Jon Holdman . I have been in several properties that were "turn-key" and the work usually is just enough to pass inspection. I have seen things like exhaust fans not being connected. No power to ceiling fans, HVAC not working, and on and one. Everything is all shiny for the most part, but a proper inspection will show the true results. Then you as the owner have to get someone else to come back and fix everything that should have been fixed in the overpriced deal. 

If you do not have another option such as buying and rehabbing it yourself, then just be sure to do your due diligence.

Originally posted by @Dawn Anastasi:

Generally, turnkey properties are more expensive than the DIY route.  (Think about how buying a pre-cooked rotisserie chicken in the deli is more expensive than buying a raw chicken and some spices and doing it yourself.)

 OK Dawn...That is a brand new analogy for me!  Not saying I am going to use it in the future, but if I do, I'll be sure to give you credit!  Pretty funny...accurate, but funny!

Chris

Medium memphis invest logo mdh 12 4 14Chris Clothier, Memphis Invest, GP | 901‑751‑7191 | http://www.memphisinvest.com | Podcast Guest on Show #224

Again, thanks all for the advice. Makes to go the preferred route of finding and creating value as most investors do. Guess I just need to hit up my local investor groups and find someone that will take me under their wing.

@Otis Sutton :   Be sure to consider the amount of time, experience and resources you have when making this kind of decision.  There are benefits to both paths and you should fit the strategy to your available time, experience and resources.  Investors sometimes make the mistake of getting ahead of themselves only to end up learning expensive and painful mistakes.  I'd be happy to discuss my personal experiences if you like.

Continued success!

Medium norada real estate investmentsMarco Santarelli, Norada Real Estate Investments | (800) 611‑3060 | http://www.NoradaRealEstate.com

Free eBook from BiggerPockets!

Ultimate Beginner's Guide Book Cover

Join BiggerPockets and get The Ultimate Beginner's Guide to Real Estate Investing for FREE - read by more than 100,000 people - AND get exclusive real estate investing tips, tricks and techniques delivered straight to your inbox twice weekly!

  • Actionable advice for getting started,
  • Discover the 10 Most Lucrative Real Estate Niches,
  • Learn how to get started with or without money,
  • Explore Real-Life Strategies for Building Wealth,
  • And a LOT more.

Lock We hate spam just as much as you