Are you looking to invest in your first property? Are you wondering about the potential of turnkey rental properties?
Today’s real estate market is booming in many neighborhoods. Yet in order to take full advantage of the current climate, you’ll need to be wise about your investment decisions.
Here’s what you might not know about turnkey property management.
What is Turnkey Property Management?
A turnkey property is a fully renovated home or building that requires little maintenance. As a landlord, you will have little more to do than purchase a property and begin renting it out.
If you’re interested in investing in real estate, but lack the time or skills to deal with regular maintenance issues, turnkey property management may be a good decision for you. This is also a smart move if you’re planning on purchasing investment properties outside of the state where you live. You will avoid major maintenance issues, and can often hire a local management company to handle day-to-day issues for you.
A turnkey property is often purchased by landlords so they can start generating revenue immediately. They won’t need to wait until plumbing, electrical, or structural issues are remedied before they begin looking for renters.
What Are The Benefits of Investing in Turnkey Real Estate?
Since turnkey properties are attractive and require little maintenance, you won’t need to worry about them being vacant long. They usually have modern features and are easy to rent out.
This is especially true in today’s market. Many neighborhoods are increasing in popularity as an increasing number of workers are gaining the ability to work remotely. And individuals and families are attracted to rental options where they can stay temporarily in a particular area until they are ready to make the big investment of purchasing a home.
Many landlords also appreciate that they can easily diversify their investment portfolios by investing in markets that aren’t local. This can really help you as the real estate markets in various areas fluctuate.
In addition, you may be able to get a warranty on a turnkey property when you purchase it. You also won’t need the hassle of constantly worrying about renovation and repair projects being constantly brought to your attention.
Some local markets are quite expensive. However, you may be able to purchase a property in another area of the country that is beginning to blossom with a new population, cashing in on your equity down the line. Check out your ultimate guide here.
How Do You Find a Good Turnkey Property?
If you’re looking for turnkey properties outside of your area, it’s important to find a solid neighborhood before you start looking for individual properties.
Consider the job growth and population growth of the area. Is it growing? Are there any major companies building offices within a commutable distance?
Consider the quality of schools and amenities in the area. Is there attractive shopping, dining, and recreation? Is public transportation easy to use?
Look for areas with high mortgage rates as compared with mortgage payments. As you consider the property type, you’ll need to consider the types of renters in the neighborhood.
For example, if there are a lot of families moving in, you may want to consider purchasing a rentable single-family home. If most of the new folks are young professionals or senior citizens, you may want to consider investing in a luxury apartment building. It’s also important to choose an area with low rental default rates.
If you’re investing in an area outside of where you live, you’ll need to investigate prospective properties for yourself. Make sure that the neighborhood and views won’t turn off prospective renters.
It’s also important to carefully inspect the renovations that have been done. Don’t be fooled by new cabinets and countertops.
You can ask several different inspectors and real estate agents about their opinions of the renovation quality. This can provide you with extra assurance that you’re making a good decision.
Managing a Turnkey Property
If you’ve snagged a quality turnkey property, you’ve taken the most important step in finding good tenants. You can advertise with photos of your pristine rental and have a number of folks interested in no time.
It’s important to run a credit check, a background check, and an interview. You may also want to speak with previous landlords and contact references. You’ll need to verify the employment and financial information of those you’ll be renting to.
Once you’re sure you’ve got tenants whose payments you can count on, make sure you’ve got your rental contract in writing. If you’ll be managing your property yourself, make yourself readily available in case a concern arises. If you’re trusting a management company to handle this, they should respond to tenants quickly.
Managing a turnkey property that you don’t live close to may also mean that you’ll drop by and pay a visit from time to time. Look over the property and make sure there are no signs of damage or potential problems.
With a turnkey property, structural issues should only happen rarely. A personal presence, however, can send the message that you’re keeping a close eye on your investment.
Turnkey Property Management
If you’re looking to invest in a property that will give you immediate income with little maintenance, look no further than turnkey property management. With a lot of research and a little luck, you could be on your way toward an excellent cash flow in no time.
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