Make Passive Income with Turnkey Property Investing
Passive income is an awesome way to make money while you sleep and create income with remote real estate. And turnkey property investing is one of the most popular methods to start.
With turnkey real estate investing, you can buy a property that’s already been renovated and is ready to be rented out. The previous owner has done the hard work and you get to reap the rewards.
This strategy is perfect for busy people who don’t have the time or patience to renovate a property themselves. And it’s a great way to get started in real estate investing with little money down.
Sounds like a dream come true, right?
But there are some things you need to know before you get started with remote property investing. In this article, we’ll cover:
- What turnkey investment properties are and how they work;
- The pros and cons of turnkey property investing;
- How to find turnkey properties;
- What to look for in a turnkey property;
- How much money do turnkey properties make;
So, if you’re ready to learn more about turnkey property investing, let’s get started.
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Disclosure: Some of the links below are affiliate links, meaning at no additional cost to you, I will make a commission if you click through and make a purchase.
Table of Contents
What Are Turnkey Properties?
Turnkey properties are investment properties that have been renovated and are ready to be rented out. The previous owner has done all the work, so all you have to do is find a tenant and collect the rent.
This type of real estate investing is popular because it’s a hands-off investment. You don’t have to worry about finding contractors, getting permits, or doing any of the renovations yourself.
It is also a great way to get started because you can find turnkey properties for sale that are already generating income. And you can use that income to help finance the purchase of the property.
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How Do Turnkey Properties Work?
Turnkey properties usually come with a property management company that will take care of all the day-to-day tasks, like finding tenants, property maintenance and collecting rent. You are still the owner of the property, but you don’t have to worry about the hassle of being a landlord, though you still have to manage the property management company.
Turnkey properties can also be single-family homes, apartments, or even commercial buildings. They can be located in any type of neighborhood, from urban to suburban to rural.
What Are The Pros And Cons Of Turnkey Property Investing?
There are pros and cons to every type of investment, and turnkey properties are no different. Let’s take a look at the pros and cons of turnkey real estate investing:
Pros:
- Passive income – you can make money while you sleep.
- hands-off – someone else manages the property for you.
- Turnkey properties are often already generating income.
- It’s a great way to get started in real estate investing.
- You can use the income from the property to finance the purchase.
Cons:
- You are still responsible for the property – if something goes wrong, you are on the hook.
- There is always the potential for problems with the property management company.
- You are limited to the geographical areas where you can find turnkey properties.
- Turnkey properties can be more expensive than fixer-uppers.
Overall, turnkey property investing has more pros than cons. But it’s important that you do your research and due diligence before investing in any type of property, because all investments come with some risk.
How To Find Turnkey Properties
There are a few different ways to find turnkey properties:
Contact a real estate agent in the area where you want to invest: Ask the agent if they know of any turnkey properties on the market.
Contact a turnkey property management company: Some companies manage turnkey properties and may have homes for sale that are not listed publicly.
Go to real estate investor meetups: At these events, you can meet other investors and learn about properties that may be for sale, including turnkey properties.
Look for turnkey property listing sites: There are a few different sites that list turnkey properties for sale, below are a few examples.
Keep in mind we are listing this as resource and have not done business with these companies. You can check their websites to see what properties are for sale and decide if they are a good fit for your investment goals.
When you contact turnkey property providers, ask about the properties they have available, the price range, and the location. You should also ask about the quality of the properties and what kind of returns you can expect.
What To Look For in a Turnkey Property
Now that you know how to find turnkey properties, it’s time to learn what to look for when you’re considering a property. Here are a few things to keep in mind:
Do a Market Analysis
Once you’ve found a property that you’re interested in, it’s important to do a market analysis to make sure that it is a good investment. This is to see if the city or town is worth investing your money into. Several factors need to be considered but here is a short list of a few things to consider.
When performing a market analysis, you’ll want to look at:
- The location of the turnkey property.
- The current real estate market in the area.
- The rental market in the area.
- If the population is increasing or decreasing.
- The average income of people in the area.
- The unemployment rate in the area.
- The crime rate in the surrounding location.
- The quality of schools.
- The vacancy rate.
You can find this information by doing a quick search online using websites like Zillow or the National Association of Realtors.
Once you’ve done your market analysis, you should have a good idea of whether or not the turnkey property is a good investment.
Do Your Due diligence
When you’ve found a turnkey property that you want to invest in, it’s important to do your due diligence. This means that you need
There are a few things you should look into when doing your due diligence:
A full property inspection: You’ll want to hire a professional inspector to look at the property and make sure that there are no major repairs that need to be made.
The property’s history: You can order a title search to find out if there are any liens or encumbrances on the property.
The current lease: If the property is already leased, you’ll want to review the lease to make sure that it is a good deal for both you and the tenant.
The surrounding area: You should also drive by the property and take a look at the surrounding area. This will give you a good idea of the neighborhood and if it is a place you would feel comfortable investing in.
The management company: If the property is being managed by a company, you’ll want to check out the company to make sure they are reputable and have a good history.
The insurance: You’ll also want to get quotes for insurance to make sure that you are properly covered in case of any damage to the property.
The tenant screening process: You’ll want to make sure that the management company or landlord has a good tenant screening process in place. This will help to ensure that you are getting quality tenants who will pay their rent on time and take care of the property.
The finances: You’ll want to get a good understanding of the finances of the property. This includes the mortgage, taxes, insurance, the income it generates, and any other expenses that are associated with the property.
The repair and maintenance costs: You’ll also want to have a good understanding of the repair and maintenance costs associated with the property. This will
The exit strategy if you need to sell: You should also have a plan in place in case you need to sell the property. This could include a real estate agent, a property management company, or finding a buyer yourself.
Landlord/tenant laws in the city or state: You should also be aware of the landlord/tenant laws in the city or state where the property is located. This will help you to avoid any potential problems that could arise.
Find out if the title is clear: You should also find out if the title is clear and there are no liens or encumbrances on the property.
Get a Property Manager
If you don’t want to self-manage your turnkey property, you’ll need to find a good property manager.
They will also handle all the paperwork and keep track of the finances. This can be a big help if you don’t have the time or knowledge to do it yourself.
You can find out this information by contacting the turnkey property providers like REI Nation. Of course some properties already have management so look at reviews on forums and from online searches.
When you’re doing your due diligence, it’s important to make sure that you understand everything completely. If you have any questions, make sure to ask the professionals and to get different opinions. This way, you can be sure that you’re making a sound investment decision.
How Much Money Do Turnkey Properties Make?
This is a difficult question to answer because it depends on a lot of factors.
The type of turnkey property, the location, the quality of the property, the occupancy rate, the rent amount, and the expenses all play a role in how much money turnkey properties make.
A turnkey property can range from a single-family home to a large apartment complex. A, B,C and D areas also play a role in how much money a turnkey property can make. These are grading systems to assess neighborhoods and apartment complexes.
A areas are the best while D areas are considered to be the worst. Of course, there are always exceptions to the rule.
A neighborhoods are often more expensive but the occupancy rates and rent amounts are usually higher. B neighborhoods are often more affordable but the occupancy rates and rent amounts are usually lower. C and D neighborhoods are often the most affordable but come with their own set of challenges, such as a higher crime rate.
The important thing to remember is that turnkey properties are an investment and, like all investments, there is a certain amount of risk involved.
You could make a lot of money or you could lose money. It’s important to do your research and understand the risks before investing in turnkey properties.
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