Recently, I have been getting calls from investors asking the same question over and over, "What are the benefits of investing in turnkey properties?"
So, I thought I would create a post for all to see!!
Investing in turnkey properties has become a viable alternative method for property investing especially when you have limited time and capital to spend. One of the things that scare some people away from real estate investing is the time commitment. A lot of people feel that owning investment property is like having a second full-time job but it doesn't have to be that way. There are some turnkey real estate investment firms out there that offer a 100% passive solution for real estate investors.
The benefits of turnkey properties are numerous, especially when you invest within emerging markets. These turnkey properties already reside in strong neighborhoods, so you immediately have a positive property investment in place.
Turnkey properties can save you considerable time and money. Here are some of the benefits of investing in turnkey properties.
1.) Economy of Scale Pricing:
When researching turnkey properties, you'll find out that many turnkey real estate investment firms are very skilled in creating an economy of scale pricing. These savvy companies keep prices lower because they're adept at making a profit on the properties they buy. Because they also have multiple income streams coming in from the properties they invest in, they reduce the amount of expenses they have in their investments. Also, when you invest in turnkey properties with a strong turnkey real estate investment firm, you can often procure a more desirable property within your budget than you would have if you went out on your own.
2.) Don't do-it-yourself:
One investment burden you may be able to alleviate with a turnkey property if you find the right investment firm is renovations. Some of the companies who provide turnkey opportunities purchase the property and renovate it up front, which saves you as the investor from having to find renovation contractors or do the work yourself. Some companies also have a standardized system in place and will automatically make renovations such as changing the carpet to hardwood or having a standard paint color throughout the property. This ultimately cuts down on maintenance repair issues from the start and turn-over costs in the long run.
3.) Help is available:
As mentioned before, there are smart and savvy turnkey real estate investment firms out there that can help you invest in turnkey properties. With their diverse industry knowledge, they're already aware of emerging markets and the best properties. They can even key you in on ideal economic destinations you may not have considered, such as Northeast Ohio.
4.) Making your investment a success:
When you invest in turnkey properties, you're not the only one banking on its probability. The turnkey real estate investment firm you work with also wants to see you succeed. Your success is their continued success, so they'll always be there to help you with advice and guidance.
5.) Instant cash-flow:
Another benefit of a turnkey property is the instant rental cash flow it creates. If you work with a 100% turnkey real estate investment firm they, more often than not, already have a tenant in place before you even purchase the property and it is cash-flowing from day one.
6.) In-house Property Management:
Besides placing and finding tenants, a 100% turnkey real estate investment firm will offer and assist with property management. This is huge for some investors because property management makes or breaks the investment. Many investors want property managers with boots on the ground and who have a personal interest in the property and area. This also allows you to purchase out of state, which is another huge benefit of turnkey properties. Plus, being able to purchase out of state can be an easy and effective way to diversify your portfolio.
When you acquire turnkey properties for a steady source of income, you're systematically building a diversified portfolio that harnesses the benefits of income-producing properties. Financial independence originates with a long-term view, a plan for diversification and a goal that some investments must offer sustaining cash flow from day one.
***Please note: not all turnkey real estate investment firms offer all of the services discussed above and that is why the most important thing when looking into turnkey properties is the transparency of the real estate investment firm or property manager. There are so many providers and management companies out there today that doing your due-diligence on them is just as important, if not more important, than doing due-diligence on the property/investment.
If I missed any of the benefits please feel free to add to this. Also, I would love to hear everyone's thoughts, do you agree, disagree, hate it, love it, etc....
