Turnkey investment properties are popular for plenty of investors who want a simple and very straightforward investment process. However, the term turnkey can refer to different things so let’s begin by clearing it up.
What is a Turnkey Investment Property?
According to Americas Housing Alliance, LLC, a turnkey investment property is a property that’s in excellent condition and does not need any renovations. It is bought as a rental property that comes with paying tenants that are already renting or will be renting following the property’s sale. Investing in turnkey rental properties is an excellent way for individuals interested in real estate investing in the event that they reside in locations where there’s lack of profitable property investment.
For instance, if you reside in San Francisco or New York where it’s virtually impossible to purchase an affordable property for cash flow purposes, turnkey investing could be a practical option. Purchasing a turnkey rental property also enables long-distance investors to participate in existing cash flow opportunities, with little to no work at all.
How Do You Find Profitable Turnkey Investments?
In addition, the majority want to spread out risk in their investments. For example, owning properties in only one place is riskier in the unfortunate that something occurs regionally. Experts recommend however that you purchase rentals near each other, even in neighboring cities, so that you could leverage only one property manager. Likewise, investing in only one location, Detroit for example, that’s entirely dependent on only one industry, or one that’s susceptible to natural disasters like earthquakes or hurricanes, come with a huge risk so diversification is key.
Turnkey companies offer convenience and you should look for reputable companies who have the right experience. This is crucial since the company you choose will also be managing your portfolio. Also, many real estate investors working on their own usually find themselves in unprofitable markets – where buy and hold, long term strategies are impossible.
When this happens, some people look for other investment opportunities and only then turn to turnkey companies. Put simply, working with an experienced and profitable turnkey provider will enable you to build a long-term, profitable investment portfolio.