Are you wondering if a turnkey property is right for you? Read here for everything you should know when deciding to invest in a turnkey property.
Managing Money

What to Know When Investing in a Turnkey Property

October 8, 2021

Real estate is a mammoth industry, with the sector expected to generate revenues surpassing $4.26 trillion globally by 2025. Skyrocketing demand for housing real estate space is one of the primary drivers of the industry. Spaces for commercial, retail, industrial, and healthcare fracture are also in high demand.

Thanks to its continued prosperity, real estate remains one of the most attractive investment opportunities for people worldwide. In America alone, 35 percent of the population consider real estate as their preferred long-term investment.

So, where do you begin when investing in real estate? Buying turnkey property is a popular choice for many Americans. In this post, we tell you all you need to know about investing in turnkey property.

Read on to learn more.

What Is Turnkey Property Investing?

Turnkey real estate investing refers to an investment strategy in which you purchase, rehab, and have a property managed through a third party. In some cases, the property you buy has already been remodeled and has a tenant already in place.

The goal of turnkey property investing is to make everything as simple as possible for the real estate investor.

Things to Know When Investing in Turnkey Real Estate

As this guide shows, turnkey real estate is one of the most stress-free investment options available. But to get the most out of your investment, there are certain things you need to know. Here are three of them.

1. Determine Your Holding Period

How long are you planning to hold your investment property before moving on to other investment options? This is the most important considerations when purchasing a turnkey property. 

Note that, like all other sectors, the real estate market experiences downturns. You need to be able to weather these storms. 

Knowing your hold period also determines how you finance the property. Generally, you want to finance your turnkey property with a length of term equal to the length of term you intend to hold the property for. 

2. Always Vet the Opportunity

A turnkey property is typically supposed to be move-in ready, but that doesn’t mean you should believe everything the seller tells you. Even if the rental property looks pristine on the surface, you still need to have it inspected thoroughly before committing to the purchase.

A seasoned inspector may be able to unearth issues that might lead to additional expenses and headaches down the road, such as poor workmanship. Vet the property carefully first, and only sign the papers when satisfied with its state.

3. Work With a Professional Property Manager

The main allure of a turnkey investment is its hands-off quality. The property investor is choosing this route because of the less legwork involved when it comes to making renovations, finding tenants, and ongoing property management.

The kind of property management you invest in will make a huge difference moving forward. That’s why you need to set aside time to find a reputable property management expert who you can trust to handle things on your behalf competently. 

Make the Most Out of Turnkey Property Investing

Many people looking to enter the real estate space often opt for turnkey property investing, and it’s easy to see why. The investment approach offers a viable approach to the conventional direct property ownership and management model and can be a lucrative source of passive income. 

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