Turnkey Investment - Good? Bad? Ugly?
Most Popular Reply
Drew SygitBusiness Member
Property Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votesQuote from @Kate Luna:
Hi everyone. I am in the process of making my first real estate investment. In San Antonio, I'm thinking about doing a 3 unit or 4 unit, with some LTR and some STR.
Wanted to hear about experiences from anyone who has invested and bought a "turnkey" property. What is the good, bad, and ugly?
I appreciate your transparency and any tips/ guidance you can share!
The biggest challenge with buying "Turnkey" is verifying EVERYTHING!
Especially in today's market.
5-10 years ago, prices were so low that Turnkey companies could make a decent profit AND provide owners with a decent rate of return.
Now, prices are up, it's MUCH harder for Turnkey companies to find deals and so their margins are getting squeezed - leading to more and more questionable Turnkeys and corners being cut.
You should verify:
1) The Class of the Neighborhood
2) The Class of the Property
3) The Class of the Tenant pool
4) What was specifically rehabbed
5) How good is the quality of the work
6) What was NOT rehabbed
7) How well was the tenant screened
8) How well has the tenant actually been performing
It's often in the best interest of the Turneky company to be vague or even hide all of the above - to get the highest sales price possible:(
So, have everything above verified by an independent 3rd party, NOT someone recommended by the Turnkey company or anyone connected to them (agents, etc.).
It's often better for YOU to find a rehab, have it rehabbed and then place your own tenant - or YOU to screen & hire those you outsource to.
BTW this is all regarding LTRs.
MTR's & STR's Turnkeys are even MORE suspect!!!
Logical Property Management4.9464 Reviews
7 Replies
- Real Estate Agent · Kansas City · Member since 2018 · 5k+ posts · 3k+ votes10mo
Turnkey meaning through a company where they place a renter, do the rehab, etc. or turnkey meaning rent ready?
- Investor · San Antonio | Austin | Dallas | Houston · Member since 2025 · 44 posts · 21 votes10mo
Quote from @Caleb Brown:
Turnkey meaning through a company where they place a renter, do the rehab, etc. or turnkey meaning rent ready?
Turnkey meaning the property is listed already renovated and with tenants in place and with a property management company in place.
Essentially, the property listing is already an up-and-running business operation.
- Real Estate Agent · Kansas City · Member since 2018 · 5k+ posts · 3k+ votes10mo
Quote from @Kate Luna:
Got it. That can be nice but there is a few things I'd verify. First do inspections, have your own inspector check the property and test the mechanicals. Make sure you walk the property or have someone to verify they did the rehab correctly. I would also verify the rents. Look at the lease and make sure it's within the market range. Some turnkey companies will fill it above market with an unqualified tenant to boost the price. Last verify the price, comps and the area class. Turnkey properties can be nice but you need to verify so you aren't stuck with a overpriced property and a horrible tenant
- Investor · San Antonio | Austin | Dallas | Houston · Member since 2025 · 44 posts · 21 votes10mo
Quote from @Caleb Brown:
Quote from @Kate Luna:
Got it. That can be nice but there is a few things I'd verify. First do inspections, have your own inspector check the property and test the mechanicals. Make sure you walk the property or have someone to verify they did the rehab correctly. I would also verify the rents. Look at the lease and make sure it's within the market range. Some turnkey companies will fill it above market with an unqualified tenant to boost the price. Last verify the price, comps and the area class. Turnkey properties can be nice but you need to verify so you aren't stuck with a overpriced property and a horrible tenant
Great advice! Thank you! I see due diligence is something that will be extremely important before I move forward with my investment.
- 10moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Quote from @Kate Luna:
Hi everyone. I am in the process of making my first real estate investment. In San Antonio, I'm thinking about doing a 3 unit or 4 unit, with some LTR and some STR.
Wanted to hear about experiences from anyone who has invested and bought a "turnkey" property. What is the good, bad, and ugly?
I appreciate your transparency and any tips/ guidance you can share!
The biggest challenge with buying "Turnkey" is verifying EVERYTHING!
Especially in today's market.
5-10 years ago, prices were so low that Turnkey companies could make a decent profit AND provide owners with a decent rate of return.
Now, prices are up, it's MUCH harder for Turnkey companies to find deals and so their margins are getting squeezed - leading to more and more questionable Turnkeys and corners being cut.
You should verify:
1) The Class of the Neighborhood
2) The Class of the Property
3) The Class of the Tenant pool
4) What was specifically rehabbed
5) How good is the quality of the work
6) What was NOT rehabbed
7) How well was the tenant screened
8) How well has the tenant actually been performingIt's often in the best interest of the Turneky company to be vague or even hide all of the above - to get the highest sales price possible:(
So, have everything above verified by an independent 3rd party, NOT someone recommended by the Turnkey company or anyone connected to them (agents, etc.).
It's often better for YOU to find a rehab, have it rehabbed and then place your own tenant - or YOU to screen & hire those you outsource to.
BTW this is all regarding LTRs.
MTR's & STR's Turnkeys are even MORE suspect!!!
Logical Property Management4.9464 Reviews- Investor · San Antonio | Austin | Dallas | Houston · Member since 2025 · 44 posts · 21 votes10mo
Quote from @Drew Sygit:
Quote from @Kate Luna:
Hi everyone. I am in the process of making my first real estate investment. In San Antonio, I'm thinking about doing a 3 unit or 4 unit, with some LTR and some STR.
Wanted to hear about experiences from anyone who has invested and bought a "turnkey" property. What is the good, bad, and ugly?
I appreciate your transparency and any tips/ guidance you can share!
The biggest challenge with buying "Turnkey" is verifying EVERYTHING!
Especially in today's market.
5-10 years ago, prices were so low that Turnkey companies could make a decent profit AND provide owners with a decent rate of return.
Now, prices are up, it's MUCH harder for Turnkey companies to find deals and so their margins are getting squeezed - leading to more and more questionable Turnkeys and corners being cut.
You should verify:
1) The Class of the Neighborhood
2) The Class of the Property
3) The Class of the Tenant pool
4) What was specifically rehabbed
5) How good is the quality of the work
6) What was NOT rehabbed
7) How well was the tenant screened
8) How well has the tenant actually been performingIt's often in the best interest of the Turneky company to be vague or even hide all of the above - to get the highest sales price possible:(
So, have everything above verified by an independent 3rd party, NOT someone recommended by the Turnkey company or anyone connected to them (agents, etc.).
It's often better for YOU to find a rehab, have it rehabbed and then place your own tenant - or YOU to screen & hire those you outsource to.
BTW this is all regarding LTRs.
MTR's & STR's Turnkeys are even MORE suspect!!!
I'm looking at some STR turnkey websites and I've been wondering if what I'm reading is too good to be true...
Thank you for the tips! I'll make sure I properly investigate before moving forward with a deal.
- 10moDrew SygitBusiness MemberProperty Manager · Royal Oak, MI · Member since 2012 · 13k+ posts · 9k+ votes
Quote from @Kate Luna:
Quote from @Drew Sygit:
Quote from @Kate Luna:
Hi everyone. I am in the process of making my first real estate investment. In San Antonio, I'm thinking about doing a 3 unit or 4 unit, with some LTR and some STR.
Wanted to hear about experiences from anyone who has invested and bought a "turnkey" property. What is the good, bad, and ugly?
I appreciate your transparency and any tips/ guidance you can share!
The biggest challenge with buying "Turnkey" is verifying EVERYTHING!
Especially in today's market.
5-10 years ago, prices were so low that Turnkey companies could make a decent profit AND provide owners with a decent rate of return.
Now, prices are up, it's MUCH harder for Turnkey companies to find deals and so their margins are getting squeezed - leading to more and more questionable Turnkeys and corners being cut.
You should verify:
1) The Class of the Neighborhood
2) The Class of the Property
3) The Class of the Tenant pool
4) What was specifically rehabbed
5) How good is the quality of the work
6) What was NOT rehabbed
7) How well was the tenant screened
8) How well has the tenant actually been performingIt's often in the best interest of the Turneky company to be vague or even hide all of the above - to get the highest sales price possible:(
So, have everything above verified by an independent 3rd party, NOT someone recommended by the Turnkey company or anyone connected to them (agents, etc.).
It's often better for YOU to find a rehab, have it rehabbed and then place your own tenant - or YOU to screen & hire those you outsource to.
BTW this is all regarding LTRs.
MTR's & STR's Turnkeys are even MORE suspect!!!
I'm looking at some STR turnkey websites and I've been wondering if what I'm reading is too good to be true...
Thank you for the tips! I'll make sure I properly investigate before moving forward with a deal.
Hey, you know there's this little "Vote" button you can also use :)
Logical Property Management4.9464 Reviews
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