Turnkey real estate has taken the world of real estate by storm. Real estate is the game of knowing which way the wind will blow, and investing properly. Turnkey properties just happen to be the most sensible solution for the real estate market we have been in for the past few years and will continue to be the most topically perfect investment opportunity moving forward. What makes Turnkey properties so perfect? There isn’t one specific reason but rather a collection of different things that make this investment vehicle attractive. Here are the top 5 reasons you should get serious about this type of investment.
1) It takes the pain (and cost) of managing a property off the owner
Upkeep and property management ends up being the bane of most people who are new to real estate. Dealing with the midnight tenant phone call, or calling an endless list of contractors to schedule maintenance on a rental is not appealing. Turnkey real estate, on the other hand, are already being managed when sold to you. The management and upkeep is usually handled by the turnkey company and you have a clear idea of all the costs associated with maintaining your rental property. What’s this mean to you? Mailbox money, you collect the checks and leave the sleepless nights and hair pulling management to the professionals.
2) A post renovated investment
Another huge reason that turnkey properties are so easy to purchase without any hassle for people is that you do not have to worry about repairs and upgrades to your investment. Turnkey properties are called turnkey because you can buy them and turn the key to begin collecting rental income from the house on day one. Managing contractors, obtaining permits, buying materials, and dealing with problems that arise are all taken out of the equation. With a turnkey rental, your potential headache is avoided. Warranty’s with your turnkey investment? An affordable new home as a cash flow rental? All are possible with turnkey investing.
3) You get a steady cash flow
Turnkey properties aren’t just easier to own, they are easier to get money from as well. Most turnkey properties have renters lined up for you right from the time when the property is yours. You can rent out the property you own and have a steady cash flow coming in every month. This is how many people invest these days. There are many markets across the country where property costs are low and rents are competitive allowing you to leverage your investment dollars further. Instead of buying up property in your own city or area where it would be prohibitively expensive, you buy in a more affordable area and generate a good positive cash. Remember, the turtle won the race, build your portfolio intentionally from the beginning.
If you don’t know the term ROI, it’s time to complete your homework. ROI stands for return on investment, or in layman’s terms, how much your invested dollar returns back to your pocket. ROI is not a new concept, as we are programmed to understand returns in the arena of stocks, mutual funds and our bank account returns. How can we analyze rental property and be able to analyze it as a business decision as opposed to a emotional response? ROI is not the end all determing factor in evaluating property, but at the very basic level it’s a good starting point. If you don’t understand the term completely, you need to contact North Peak Investments right away and let them walk you through the process step by step. Knowledge is king!
5) Property Management
I mentioned in the first paragraph the benefit of having property management in place so you can avoid the headaches of dealing with your rental property. I would be doing a diservice if I did not caution investors on a few pitfalls of management of real estate by third parties. So our title is a bit misleading, and should read, top 4 reasons turnkey real estate makes sense and one topic to be aware of, however that title is not as catchy. I digress. Due to the fact that you most likely will be owning property in a city other than your own, you will have a property management company that is managing your asset. This realistically should be #1 on our list, as this is where your entire investment hinges. Do you have management in place that has incentive to perform? Did you buy from a vendor that ships their property management to a third party provider after the home is sold? If you buy a turnkey property from a vendor that does not have in house property management, I want to caution you right now. This topic alone could fill an entire blog post so I’ll leave you with one question. Does your property management have incentive to rehab the house to higher standards and place the best tenants? If you don’t know the answer, or your answer is no, please seek more information and understand how important this is prior to investing any hard earned money.
This all may seem overwhelmingly difficult but it doesn’t have to be, we have already done all the hard work and are happy to walk you through the process step by step. Like any investment strategy there is much to be learned. Please contact North Peak Investments experienced investors and allow us to educate you on real estate investing options for your portfolio. Contact us online at www.NorthPeakInvest.com or call our office at 855-290-2444. We look forward to connecting with you.