Turnkey real estate is many investors’ favorite form of investment opportunity. And for good reason. Turnkey real estate is a great way to boost your portfolio with monthly cash flow with relatively little stress involved.
But what is turnkey real estate? And should you invest in it in 2022?
Here, we’ll explore these questions to let you know why investing in turnkey real estate in 2022 might just be the best decision you will make.
What is turnkey real estate?
First, we’ll define what turnkey real estate is and how it works.
A turnkey investment property is one that is all ready to go, often stocked with a tenant and an ongoing lease agreement. You buy the property, and that agreement is turned over to you, making you an instant landlord.
This saves you all the time and effort of finding ideal tenants, preparing the property, and marketing it with effective listings. Instead, all you have to do is turn the key (after giving tenants the proper notice of entry, of course).
Turnkey real estate can be purchased either rehabbed and ready to rent or already occupied with tenants. No matter the case, however, you buy a property that’s able to accrue income with only a minimum of work.
You can find all kinds of properties listed that are ready for or already occupied with renters. This simply happens when a real estate investor doesn’t want to continue holding the property in their portfolios for whatever reason, so they put it up for sale without forcing tenants out.
From here, you can begin to collect monthly rental income and make back your return on investment (ROI). The process is often easier than investing in other forms of rental properties since much of the work is already done for you, and it’s more possible than you might think.
Should you invest in turnkey real estate?
Now that you know what turnkey real estate entails, it’s time to find out if it’s the right investment type for you.
In 2021, investing in real estate can be a great way to diversify your portfolio with a relatively stable and strong performer. If you’re looking at a growth market, turnkey real estate can be especially lucrative.
But how do you know if a turnkey opportunity is the right way to go?
Here are some indicators that a turnkey investment will work for you:
1. You’re a new real estate investor.
Turnkey properties are great opportunities for new investors to get in the game and learn about managing properties. Because most of the remodeling and even tenant screening work is done for you, you can jump in without having to learn everything all at once.
2. You’re interested in a mostly hands-off opportunity.
Some investors want an experience that they take full control of. They want to be able to customize the property, find the right tenants, and adjust the lease agreement to fit their desired specifications. If you want all this control, a turnkey property likely isn’t right for you. Instead, these opportunities are mostly hands-off.
3. You don’t want to deal with remodels.
Sometimes getting an investment property in a rentable state is a massive job. If you don’t want to deal with remodels, renovations, and all the marketing and administrative work that comes later, then turnkey properties are right for you.
4. You trust the seller and the situation.
Since most turnkey properties are purchased without the investor even seeing them in person, you need to be able to trust the situation. The seller should provide adequate and verifiable details about the property and everything should add up. If the deal seems too good to be true, it probably is.
5. You’re willing to pay more for quick rental income.
Because they can be such an easy way to quickly produce income, turnkey investment properties usually come at a higher price. This means that you need more capital to purchase them and the investment may take longer to recoup. The upside of this of course is that you can start accruing rental income right away.
If one or more of these conditions apply to you, then making a turnkey investment in 2021 is a very good idea. After all, housing across the nation is in short supply this year, so renters will be vying for an opportunity to find a great unit. Even if you have turnover from your turnkey property, vacancies aren’t bound to last long.
The only challenge you have may be finding the ideal property for your needs. From there, you can make the most of your investment to ensure it remains lucrative.
How can you maximize the potential of a turnkey investment?
Maximizing the value of your turnkey investment takes preparation, thorough research, and the help of knowledgeable professionals. Not every property is a guaranteed win, and you’ll need all the help you can get to produce ideal results.
Here are some tips for streamlining the investment process:
Filter your property search by real estate that can meet your investment goals.
Thoroughly evaluate property history, its income potential, and local market conditions.
Create a detailed inventory of expenses and revenues.
Consult financial experts to ensure you’re not missing anything.
Secure financing that leaves you with a substantial net gain each month.
These tips can help you navigate lucrative turnkey investment opportunities to make the right choice for you. Just make sure you do all your research before jumping in a deal, and consult with reliable experts.
Having another set of eyes on your property investments can ensure that those investments are financially viable, so build a list of resources you can turn to before getting started. From there, you can find and secure turnkey rental properties that grow your nest egg into something incredible.
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