Out of state investing: Buy new build or turn key renovated properties?

[Pratik Patel]

Hello all,

For out of state investors whose goal is buy turn key single family homes in class B areas and hold them long term for cash flow and appreciation, 1) is it better to buy new build or a turn key renovated property from companies with good reputation like Spartan Invest, REI Nation etc.?

2) What are pros and cons of buying each type of property if goal is to hold them long term?

3) What is lifespan of turn key renovated properties? 

Thank you in advance.

[Pratik Patel]

Quote from @Melissa Justice:

@Pratik Patel,

Hey! great question, and one that comes up a lot among out-of-state investors looking to build long-term rental portfolios.

If your goal is to buy turnkey single-family homes in Class B areas and hold for cash flow and long-term appreciation, here’s a breakdown comparing new builds vs. renovated turnkeys to help guide your decision:

1) New Build vs. Renovated Turnkey: Which is Better?
There’s no one-size-fits-all answer - it really depends on your investing priorities. Both options can work well if you’re buying in the right markets and from a reputable operator.

In general:
New builds tend to be lower maintenance, command higher rents, and come with warranties.

Renovated turnkeys often offer better initial cash flow and lower purchase prices, especially in established neighborhoods with consistent tenant demand.

If you’re investing remotely and plan to hold long-term, both asset types can perform well - it’s about matching the property type to your investing style and goals.

2) Pros and Cons of Each
New Build Renovated Turnkey
Pros - Minimal repairs for 5–10 years
- Energy efficient and modern
- Higher tenant appeal
- Often in growing suburban areas - Lower acquisition cost
- Immediate cash flow
- Infill locations with existing infrastructure
- Potential for stronger appreciation in revitalizing neighborhoods

Cons - Higher upfront cost
- Fewer options in mature, central neighborhoods
- May not cash flow as strongly upfront - Risk of hidden issues if not properly renovated
- Shorter lifespan on some components (if not replaced)
- Potentially higher maintenance over time
Ideal For Hands-off investors who want long-term stability and fewer surprises Cash-flow focused investors looking for better entry points and established rental demand

3) What’s the Lifespan of a Renovated Turnkey?
This depends on the age of the original property and how thorough the renovation was. If the major systems - roof, HVAC, plumbing, electrical - were replaced or certified in good condition, you’re typically looking at:

5–10 years of relatively low maintenance

15–20 years before you may need to revisit major CapEx items (depending on usage, climate, and tenant care)

That said, some renovated homes are 40+ years old, so it’s important to review the scope of work and ensure there’s documentation on what's been updated.

Both strategies can be solid, especially in the Midwest and Southeast, where you can still find cash flow in Class B neighborhoods with long-term growth potential. The key is working with trusted teams, doing your due diligence on the renovation quality or builder reputation, and having a solid property management plan in place.

I personally like to balance both types in my portfolio to hedge risks and tap into both cash flow and equity growth.

Let me know if you ever want to talk more about specific markets or compare deals side by side - always here to help!

Best of luck,

Melissa

Thank you, Melissa.