G’day, mates! How are ya?
Its Engelo Rumora here, your favorite Australian, giving you a post on what, in my opinion, are the 3 key traits that every true and genuine turnkey real estate company should possess.
Over the past 6 months, I have written over 30 articles and not one of them was about turnkey real estate, even though I own a business that mostly focuses on offering turnkey investments to out of state and country investors.
So here it is!
Every true and genuine turnkey company should always have the investors’ best interest at heart. All properties should be sold at market or below market value; otherwise, there is no point of the investors buying turnkey properties if they are paying more than what a property is actually worth. The only way you should consider paying more than market value is if you are certain that the quality of property management is so good that the promised return on paper can and will be achieved in real life for an extended period of time (3-5 years is a good timeframe).
Also, in my opinion, investing in turnkey properties should be a completely passive and hands off investment. You should establish trust and a relationship with the turnkey provider before a “buy” decision is made. The turnkey company should deliver a property that requires no work whatsoever, along with a strictly vetted tenant who is willing to stay and pay for the long term. The after service provided should also include assistance, if not compete control, with paying property taxes, insurance and any maintenance issues that might arise in the future.
You, as the investor, must trust the process and allow the experts on the ground to do their job. Words to remember here are trust and relationship.
DO NOT invest until those two traits have been established. Both trust and relationships are built over time and not over one email, phone call or meeting.
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3 Key Traits to Look For in Any Reputable Real Estate Turnkey Company
1. Prompt Communication
The only thing connecting most out of state and country investors to their properties are the teams they have in place on ground. I remember when I was investing in the US from Australia, I would always feel at peace when I received a prompt reply from whoever regarding a query that I had about a particular property I owned.
Make sure that the entire team of the turnkey company is prompt at replying. The longest you should wait for a response is 48 hours. Excuses of “Sorry, we are just so busy” won’t cut it. If someone is too busy to respond in a timely manner, it means they are making a good enough profit to hire full time staff just to reply to emails or answer calls.
2. In-House Property Management
I don’t know of many well-known turnkey companies in the country that are successful without having in-house property management. Just think about it. Why would an outsourced property management company go out of their way for anything just to collect a measly 10% commission every month? Let’s assume they don’t rip you off with tons of “on top” monthly maintenance fees along with overcharging for new tenant placement. On the other hand, when property management is in-house, meaning owned and controlled by the turnkey company that sold you the property, it is in their full interest to make sure that everything runs smoothly and they hit the promised paper numbers. Why? Because you will buy more, or tell mum, dad, brother, sister, cousins, friends, etc.
Word of mouth marketing and referrals are the best and cheapest way to attract new business. Most of the biggest “cats” in the turnkey business know this. Another reason why is due to reputation. It takes a lifetime to build it, but only 5 minutes to lose it. Keywords once again are trust and relationships. Everything I am sharing with you today is assumed on the basis that time has been spent on establishing trust and a relationship with the key on ground people behind the operation.
3. No Pressure Sales Tactics or Gimmicks
Guess what? Where one door closes, another will always open. Don’t fall for those who say, “This is a once in a lifetime opportunity to purchase these amazing discounted properties. Rumor is the market will boom tomorrow and you will miss out.”
What a joke. There will always be another deal around the corner. I can’t tell you how many times I thought I bought the “deal of the century,” only to find a better one come along two weeks later, and I couldn’t buy it because I tied up all of my funds in the first one.
As you can see from above, I focus on two key areas; Trust and building Relationships. This should also be the keys to your investment success.
I hope I haven’t ruffled anyone’s feathers out there, but hey, I’m not saying I am right or wrong — just sharing my perception and opinion.
Investors: What traits would you add to my list?
Leave a comment below, and let’s discuss!