Buyers in Cleveland: Turnkey Rentals or BRRRR?

Question

It seems that most buyers I connect with in Cleveland and Columbus are into rentals that need a little bit of work. Why not turnkey? I would be interested in turnkey rentals if the price is right and the estimated rent is over 1%.

Gladimir Lobo · Answer

Look, there are definitely shady people out there.

But sometimes what people call getting burned is really getting outclassed.

If you're buying your first investment property and the person across the table has done hundreds of deals, they're going to see things you don't.

That doesn't always mean they cheated you. It may just mean they had more experience.

That's why labels like turnkey, rent-ready, and BRRRR don't mean much to me.

What matters is whether you understand what you're buying.

What's been fixed?

What still needs work?

Will it be easy to manage?

Will it be easy to refinance or sell later?

At the end of the day, your job isn't to trust the label.

Your job as the investor is to understand the asset.

Gladimir Lobo · Answer

Stop asking whether a property is turnkey or a BRRRR. Start asking whether the improvements actually make the property easier to own, easier to manage, and easier to sell. That's what determines whether the investment succeeds.

Min Zhang · Answer

Hey Tom! I can see the appeal of turnkey, especially if the numbers work. A property that’s already rent-ready can save time and make things simpler. For some investors, though, a little work gives them more room to add value and improve the returns.

Arman Ahmed · Answer

Turnkey can absolutely make sense if the numbers are right, especially for an out-of-state investor who values simplicity. The challenge is finding a truly turnkey property where the price, rent, expenses, and neighborhood all support the return you’re targeting. In Cleveland and Columbus, a light value-add deal can sometimes give you more upside than paying a premium for turnkey, but I’d compare both on actual cash flow and total basis. If a turnkey property genuinely pencils at 1%+ with realistic expenses, I’d definitely consider it.

Denis Woosley · Answer

True turnkey properties will demand a higher price point which makes reaching your desired net returns more difficult. It shrinks your net cash on cash returns when the purchase price is top of the market. Most deals are had on the buy side when there is some deferred maintenance so you can get the property a little bit cheaper and put in the extra work to get it rent ready.

Marc Rice · Answer

Yeah. Happy to share turnkey properties meeting the 1% rule

Jimmy Lieu · Answer

Good point, Tom. I think a lot of buyers in Columbus are drawn to rentals that need light work because there’s usually more opportunity to create equity and improve the numbers. That said, I’d absolutely consider turnkey too if the purchase price and rent make sense. Finding a truly turnkey property that rents above 1% can be tougher, but those deals do pop up. At the end of the day, I’d rather buy based on the numbers than whether it’s turnkey or needs a little work.

Vijay Friedman · Answer

@Tom LanzanoTurnkey can definitely make sense if the numbers work. I’d just look beyond the 1% rule and run the actual cash flow with taxes, insurance, management, maintenance and financing included. Sometimes a slightly lower-yield turnkey deal can still be a better buy than a value-add property once rehab cost, time and execution risk are factored in.

Ed O. · Answer

Because many turn key sellers have an established pattern of screwing their buyers.  There's a nearly endless supply of stories here where out of state,  newb buyers have been burned badly by various turn key sellers.

Additionally there's many turn key affiliates here that make money as referrals or partners pumping up the tires about turn key deals (without ever indicating it) .... they're on the take. It's become like turn key real estate is a time share's cousin.

Buyers in Cleveland: Turnkey Rentals or BRRRR?

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