What It’s REALLY Like to Own a Turnkey Rental Property
Thinking about investing in turnkey real estate? Great! You’ve definitely come to the right place. Turnkey is my specialty, and it’s a great fit for any type of investor - new, experienced, young, old, working full-time, whatever. The reason why it’s such a great fit is because turnkey has 3 major benefits going for it:
- You have an experienced and knowledgeable partner guiding you through the investment process (the turnkey provider);
- You’re investing in a property that will make money immediately (cashflow);
- It’s the most passive form of real estate investment there is, so you don’t have to do as much as you would with other investment strategies.
So now that you know all this, maybe there’s one more thing you’re wondering about - what it’s REALLY like to own a turnkey rental. Before you pull the trigger, you want all the details; the good, the bad, and the ugly, and I don’t blame you. Investing in anything without having a few real life accounts for reference is just dumb.
To help with that, I’ve gathered a couple stories from investors I’ve worked with, as well as one person who is an investor friend of mine. Here’s what they have to say:
Brian, first-time investor, based in Denver, invested in single-family home in Kansas City
“My experience with turnkey investing has been 95% positive. I say 95% because I’m a perfectionist and there are always little things that I feel could be better. So a 95 from me is actually very good! When I started researching turnkey investing, I quickly realized that Kansas City was one of the best markets for this strategy. The local economy and population are growing, and housing is at a premium. I connected with a local provider who I was referred to by another investor, and right away I could tell they knew what they were doing. We discussed my goals and financial situation, and then they showed me the homes in their inventory that best met my criteria. They had tenants in place and I was able to see current numbers on home value, rental rates, expenses, and more. I decided on a property and it’s been great getting paid every month! I still work full-time, so this is a side gig for me that is providing that extra income I wanted.”
Sheila, based in Cincinnati, invested in her third single-family property in Dayton
“My investment experience includes 1 fix-and-flip and 2 turnkey properties. I have to say that the turnkey properties have been much better to me. With my flip, I found a great deal I couldn’t pass up. Once I got into the repairs, though, the expenses quickly added up and the savings I thought I had made was pretty much vanishing each and every month. I finally got it finished and sold, and I did make a bit off it, but it’s not like the steady, reliable income I’m getting from my 2 turnkey rentals.”
Aaron, veteran investor, based in Los Angeles, has invested in several single- and multi-family homes in Kansas City, Dallas, and Nashville
“I’ve invested in close to 50 properties in various markets, both residential and even a few commercial. I have used a few different strategies for this, as well as a few different turnkey providers. The first turnkey company I used was not good. They were clearly only concerned about their own profit margin, and they weren’t forthcoming about some of the issues with their properties or their property management services. My advice if you invest in turnkey? Make sure the provider you go with is legit. Investigate them and get references. There are good ones out there, because I’m working with some now in the markets I’m invested in, but I really researched them first. Most of my time is spent researching, whether it’s a new market or a new property or figuring out how I can make even more money. Turnkey is passive, but only if you want it to be. I prefer to take a more active role so that I add more properties and make more money.”
Those are just 3 snapshots of what it’s really like to be a turnkey investor. For most of the people I know and work with, turnkey has been a great experience for them. Of course, there are always going to be a few horror stories out there, but just like Aaron advised, do your research. Taking the time to educate yourself will pay off in the long run and help prevent you from making bad decisions.