Those who are a little new to the term “turnkey rentals” will quickly find that it is a worthwhile investment. A turnkey property is simply a property that is already fully renovated and constructed. We buy old or foreclosed properties and renovate them, updating them so that they are ready to rent out to tenants.
The term “turnkey” refers to anything that you can use immediately. Everything is in place and ready to go – it’s like handing over the keys once you purchase the property.
Buying a turnkey property is a great investment for the following reasons:
Buying property in order to rent it out needs years of experience in the real estate business. There is a reason flipping houses isn’t for everyone: You will need to buy the house, hire contractors, interior designers, order materials and equipment, hire real estate agents, find property managers — the list goes on and on.
With a turnkey property, everything is already in place. The home is already fully renovated and ready to move in. There are property managers in charge who are in charge of maintenance, screening tenants, and collecting rent, among other responsibilities.
You will be mostly in charge of investments. In the real estate business, investors who own turnkey properties are called “passive investors” as they provide funding, without active involvement in the management of the properties.
Turnkey properties provide a steady cash flow as long as there are tenants paying rent. It is a great way to supplement your income as you receive the rent money with the property management costs already deducted. Expect between 20% to 40% in cash-on-cash returns.
Investing in a turnkey rental property has certain tax benefits as well. You can get tax deductions based on the depreciation of the property, insurance premiums, etc. It is best to consult with your accountant first to see how real estate investment can lower your tax bill.
Turnkey rental properties are indeed a great investment to make. They are especially beneficial to those who want to build their real estate portfolio or just want to make some extra money.