If you’re looking to save some cash, you can invest in turnkey rentals without the help of a company. More experienced buyers typically go this route, as they’re accustomed to the day-to-day responsibilities required of managing rental properties. To make their jobs easier, many elect to use tools like affordable bookkeeping software, which can automate a number of daily financial tasks and even assist in preparing tax documents. Other Considerations Wondering if you should invest in turnkey properties? You should first get a good idea of your personal investment goals. Then, compare them with the outcomes associated with turnkeys. To get started, ask yourself the following questions: Are you a hands-on or hands-off investor? Do you prefer to DIY-ing your properties? How involved do you want to be in your investment? Do you have the upfront equity required for a turnkey? Would you prefer working with a turnkey real estate investment company? How do you feel about the maintenance of your current properties? It’s important to have the answers to these questions before getting into turnkey investments. You’ll want to take a moment to sit down and consider your options so you can make the most calculated financial decisions possible. Are Turnkey Properties Right for You? Depending on the type of investor you are, turnkey rentals may or may not be the right investment strategy for you. A turnkey property might be for you if any of the following apply: You’re more of a hands-off investor. This means you aren’t interested in renovating properties, full-gut rehabs, or putting your time into an investment. You’re looking for more immediate passive income. With a turnkey, you won’t have to wait patiently for your ROI—your cash flow starts as soon as you begin renting. You have the upfront equity required. Turnkeys are popular with investors who have savings they’re willing to put towards a larger investment. But not having a lump sum lying around doesn’t mean that you can’t get into turnkeys; you just need enough to get started. You don’t have the time to be very involved. If you’re looking to integrate real estate investments into your busy life, then low-maintenance turnkey houses and properties may be right for you. As always, talking with a trusted financial advisor is a great idea. Their knowledge of the market and your finances will allow them to help you make whatever decision is truly right for you and your investment portfolio. Getting Started Starting your career in turnkey real estate begins, like many things, with research. Try researching whatever market you’re interested in (turnkeys don’t have to be local) and finding prospective properties. Once you’ve got a good idea of the market, personalize your search: What works for you and what doesn’t? Alternatively, you can partner with a turnkey investment company, who will do the heavy lifting for you. Either way, you’ll want to carefully weigh your options and do the best to plan for your most profitable future. Never hesitate to consult financial and legal professionals throughout the process so you can make the best investment decisions possible. FAQs

Should You Invest in Turnkey Properties?

Q: What are turnkey properties?

Turnkey homes are investment properties that require little to no work before being rented out. They are typically renovated and move-in ready right after the sale, ideal for those looking to start generating rent immediately.

Q: Can turnkey properties offer a good ROI?

Yes, turnkey properties can provide a strong ROI by allowing immediate rental income without the delay of renovations. The key is in selecting properties that align with your investment goals and have a stable rental market.

Q: Are turnkey properties a good investment?

Yes, turnkey properties can be an excellent option for investors seeking instant cash flow and lower maintenance efforts, especially for those interested in long-term rental income.

Q: What is the difference between turnkey renting and traditional rentals?

Turnkey rentals require minimal setup and are ready to generate income right away. Traditional rentals may need significant renovations and time before renting.

Key Takeaways

Turnkey properties are investments that require minimal work before being rented out, offering a hands-off investment approach ideal for generating immediate rental income.
They are typically move-in ready and can quickly start generating cash flow, though they tend to be more expensive due to prior renovations and come with risks like uncertain renovation quality.
For those interested in turnkey real estate, researching property markets or partnering with specialized investment companies can provide valuable guidance.
Consider your investment goals and style, and explore turnkey options that align with your financial and involvement preferences to make an informed decision.

Turnkey properties are a special kind of investment property that rose in popularity right after the 2007–2008 housing market crash. It was actually more affordable to buy homes than to rent them at the time. Since then, turnkey properties have maintained their popularity and importance in the rental game for investors and homebuyers alike.

But what exactly is a turnkey rental, and how can landlords and property managers best utilize them? We’ll drop everything you need to know in the article below.

What Are Turnkey Properties?

A turnkey real estate property is one that requires little to no work before it can be rented out to tenants. Think of newly renovated properties that are move-in ready the moment after the sale—ones that only need the turn of a key for you to begin renting.

They may require the smallest bit of work, such as paint jobs and other minor fixes, but the unit should need no major renovations for it to be considered a turnkey rental. Sometimes turnkey rentals are even furnished. These properties are super hands-off; investors shouldn’t have to do very much to start turning a profit. They’re an excellent option for getting started with long-term rentals, since their fresh renovations make them ready for the long haul.

Pros of Turnkey Rentals

There are plenty of advantages to investing in turnkey real estate. If you’re throwing around the idea of investing in a turnkey property, consider the following pros.

Minimal Labor

Perhaps the most obvious pro of a turnkey property is the minimal workload. If you’re more of a hands-off investor, then turnkeys are ideal for you. They require very little manual labor at all (if any) and are move-in ready shortly after purchase. The majority of turnkey investment work is done initially when purchasing the property and getting your rental set up.

Ready to Rent

When you purchase a turnkey rental, you can expect a quick turnaround. Since it likely won’t need much work, you’ll start looking for qualified tenants very soon after closing. You can concentrate your efforts towards advertising, screening, and filling the units rather than fixing them.

Immediate Cash Flow

After finding the right tenants and getting your rental ready, you can set your investment into motion. You can start earning a regular income from tenants right away, since you won’t have to worry about footing the bill for renovations and other costs. Plus, a rent-ready home should be lower maintenance, meaning you won’t have to worry about faulty appliances and the like, as most things will be in tip-top shape.

Cons of Turnkey Rentals

As with all rental property investments, turnkeys do come with some risks of their own. It’s important to be aware of them before getting serious about investing in one.

More Expensive

Of course, turnkey properties do tend to be more expensive by nature. Since someone else has put in the time, materials, and labor in the property, expect to pay a bit extra for it. Depending on the location, however, turnkeys won’t always necessarily be overly expensive. Part of mastering turnkeys has to do with perfecting the search; some areas are simply better for renting than others, and turnkeys are likely to be less expensive in such locations.

Risky Renovations

You may not always know exactly who renovated your turnkey properties, and how they did it (but in some cases, you can ask, and you should). Were professionals involved? DIY-ers? What exactly was the quality of their work? Do-it-yourself renovations and rehabs are increasingly common investing strategies in real estate—and while it’s good to give properties a second life, you may run the risk of inheriting a turnkey with some poor workmanship.

Turnkey Real Estate Investing Methods

There’s no playbook on exactly how to go about investing in a turnkey property. There are, however, two common strategies when it comes to getting started.

Management Companies

The turnkey real estate investing game is nothing new, but it may be for you. There are a number of companies nationwide that work in turnkey property restoration specifically. If you’re looking for some guidance, partnering with one of these companies in your area is a great way to get started. They’ll often flip houses (or purchase turnkeys), then help you with the process of buying and managing your own. Plus, some will even offer property management services so you don’t have to deal with the upkeep that comes with investment properties.

Paving Your Own Path

If you’re looking to save some cash, you can invest in turnkey rentals without the help of a company. More experienced buyers typically go this route, as they’re accustomed to the day-to-day responsibilities required of managing rental properties. To make their jobs easier, many elect to use tools like affordable bookkeeping software, which can automate a number of daily financial tasks and even assist in preparing tax documents.

Other Considerations

Wondering if you should invest in turnkey properties? You should first get a good idea of your personal investment goals. Then, compare them with the outcomes associated with turnkeys.

To get started, ask yourself the following questions:

Are you a hands-on or hands-off investor?
Do you prefer to DIY-ing your properties?
How involved do you want to be in your investment?
Do you have the upfront equity required for a turnkey?
Would you prefer working with a turnkey real estate investment company?
How do you feel about the maintenance of your current properties?

It’s important to have the answers to these questions before getting into turnkey investments. You’ll want to take a moment to sit down and consider your options so you can make the most calculated financial decisions possible.

Are Turnkey Properties Right for You?

Depending on the type of investor you are, turnkey rentals may or may not be the right investment strategy for you.

A turnkey property might be for you if any of the following apply:

You’re more of a hands-off investor. This means you aren’t interested in renovating properties, full-gut rehabs, or putting your time into an investment.
You’re looking for more immediate passive income. With a turnkey, you won’t have to wait patiently for your ROI—your cash flow starts as soon as you begin renting.
You have the upfront equity required. Turnkeys are popular with investors who have savings they’re willing to put towards a larger investment. But not having a lump sum lying around doesn’t mean that you can’t get into turnkeys; you just need enough to get started.
You don’t have the time to be very involved. If you’re looking to integrate real estate investments into your busy life, then low-maintenance turnkey houses and properties may be right for you.

As always, talking with a trusted financial advisor is a great idea. Their knowledge of the market and your finances will allow them to help you make whatever decision is truly right for you and your investment portfolio.

Getting Started

Starting your career in turnkey real estate begins, like many things, with research. Try researching whatever market you’re interested in (turnkeys don’t have to be local) and finding prospective properties. Once you’ve got a good idea of the market, personalize your search: What works for you and what doesn’t?

Alternatively, you can partner with a turnkey investment company, who will do the heavy lifting for you. Either way, you’ll want to carefully weigh your options and do the best to plan for your most profitable future. Never hesitate to consult financial and legal professionals throughout the process so you can make the best investment decisions possible.

FAQs

What are turnkey properties?

Turnkey homes are investment properties that require little to no work before being rented out. They are typically renovated and move-in ready right after the sale, ideal for those looking to start generating rent immediately.

Can turnkey properties offer a good ROI?

Yes, turnkey properties can provide a strong ROI by allowing immediate rental income without the delay of renovations. The key is in selecting properties that align with your investment goals and have a stable rental market.

Are turnkey properties a good investment?

Yes, turnkey properties can be an excellent option for investors seeking instant cash flow and lower maintenance efforts, especially for those interested in long-term rental income.

What is the difference between turnkey renting and traditional rentals?

Turnkey rentals require minimal setup and are ready to generate income right away. Traditional rentals may need significant renovations and time before renting.

How does turnkey investing compare to DIY real estate projects?

Turnkey investing is less labor-intensive and faster to generate an ROI, whereas DIY projects might offer cost savings but demand more time and effort.