Turnkey real estate is a type of property that is already livable. In other words, it is ready for a move-in and no longer requires repairs.
Investors like to invest in turnkey real estate because it is a hands-off and passive type of investment where they are not required to spend most of their time or interest in it, but the property is still capable of yielding good profit.
If you’re an investor who wants to invest in real estate but is too busy to look after it, you might as well opt for turnkey real estate. But before you invest in one, you need to consider the following tips first:
1. Create A Plan For Your Turnkey Property
Creating a plan is an important step that you must never forget to do, especially if you’re investing in turnkey real estate. After all, turnkey real estate, just like other businesses, can sometimes be unpredictable and the only way to prepare for this is to have a plan in place.
Think about everything you want to do with the turnkey property you’re going to buy and lay it all out in a detailed and structured plan so that you’ll be able to figure out what you’re going to do with it after investing.
2. Get Professional Property Management Services
Even though turnkey properties are hands-off investments, it is still up to you as the investor to handle property management. Of course, you can always do this on your own, but if you are too busy or you don’t really know where to start, you can always hire a professional to take care of all the affairs of your turnkey property and help you manage your real estate investment.
Having a professional property manager can help make the transition as smooth as possible, and will always keep you up-to-date with its progress. Among other things, property management services can help you with the following:
- Tenant screening
- Collecting rent
- Maintenance and repairs
- Responding to tenant complaints
3. Calculate The Long-Term Income Potential Of A Turnkey Property
Turnkey real estate properties offer different income potentials. For instance, a turnkey rental home that has been occupied for a year can yield more income than a turnkey vacation rental. This is because turnkey vacation rentals are only occupied during vacation times or holidays, whereas a turnkey rental home is occupied all year round.
It’s important to calculate the long-term income potential of the turnkey property you’re going to invest in. Review the overall turnkey real estate market and see which of the properties can promise good returns in the long run.
4. Perform Home Inspection First
Before investing in a turnkey property, you need to make sure that it has undergone home inspection first. After all, the whole point of investing in turnkey real estate is that you no longer have to deal with the rehab process of a property. This means that you don’t need to make necessary repairs in the property just to make it suitable for living, which is why you’ll need to have it inspected first before you invest in it.
Performing a home inspection can be very helpful for an investor, especially if they’re not a local or has no idea about construction. You want to ensure that the turnkey property you’re going to invest in is of high quality. Aside from home inspection, you might as well ask for a certificate of occupancy or any other document that can show you the improvements made by its previous tenants.
5. Ask For The Best Turnkey Provider Around
Your turnkey provider should have a great understanding of the area where they are offering turnkey properties. It’s not that hard to find a turnkey provider as you can always ask real estate agents, bankers, and other turnkey investors if they know a turnkey provider you can rely on.
Once you find a good turnkey provider, be sure to ask them for references or other investors who previously bought turnkey properties from them. This is a good way of finding out everything there is to know about the turnkey provider.
Investing in turnkey real estate can yield a good amount of profit, especially in the long run, but only if you do it properly. Investing in turnkey real estate is even considered as one of the best ways to grow your investment portfolio. Be sure to consider the tips above if you are looking to purchase a turnkey property. These tips should help you avoid losing money and wasting your valuable time when you have decided to invest in turnkey real estate.