Turnkey homes are defined as homes that are ready to move into upon closing on the home. Generally, turnkey homes are fully renovated and rehabbed, and are an attraction to investors.These homes got some much needed TLC and were then rented out to generate revenue.
1. One major benefit is the affordability of time. If an investor is looking to purchase a home and rent it out as soon as possible, turnkey homes are a the best bet. Despite the higher price tag, the purchaser has to neither sink money into the home for renovations/repairs nor waste time waiting for repairs to get done.
2. Another convenience of buying a turnkey home is that you don’t really need extensive knowledge in real estate or property management to get involved. Realistically, once you buy a turnkey from a broker you can assign a property manager to manage the property for you. This could include prospecting for tenants, handling repairs/maintenance, pursuing evictions, and taking care of tenant issues.
3. Pros #1 and #2 lend themselves to pro #3, being that turnkey homes can be a form of truly passive income. You can maintain a full-time job and keep whatever schedule you like. You get to decide how much time and effort you spend working on your investment.
Challenges
1. The benefits that were previously can result in your paying a premium for a hands-free approach to turnkey investing. While some view the cost of turnkey investing as well worth it, others may feel differently.
2. Your experience with turnkey properties can very well come down to how well your property manager functions. If you prefer an active role with maintaining your investments, this may not be something you’d face. However, if you have a poorly performing property manager, you might find yourself having to deal with some of the more surly sides of dealing with tenants.
Note:
This may not be a challenge depending on what you have in mind when making turnkey investments. The majority of turnkey homes don’t really generate appreciation as time passes, so if you’re looking to flipping the home for a profit turnkey investing may not be the lane you’d want to be in. Having said that, turnkey homes are usually in areas that have a stable market and, as mentioned previously, are a great way for passive income.
