Real Estate Investing

What is a Turnkey Property?

Casey

November 20, 2022

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https://www.getaway.co/articles/what-is-a-turnkey-property

A turnkey property is a type of investment property that is basically "ready to go" from the day of purchase. That means that, as the investor, you won't have to put any additional time, money, or effort into making the property rent-ready; everything will already be taken care of for you.

In many cases, turnkey properties are brand new construction homes or units that come fully furnished with all appliances included. They are often purchased as vacation rentals or long-term rentals, and come with a property management company already in place to take care of day-to-day operations. For investors looking for a hands-off approach to real estate investing, turnkey properties can be a great option.

Pros and Cons of a Turnkey Property

There are many benefits to investing in turnkey properties. First and foremost, they offer a hands-off investment option for busy investors. All of the research, renovation, and marketing work has been done for you by the time you purchase the property. Another benefit of turnkey properties is that they offer a higher ROI than traditional investment properties. Because they are usually located in high-demand areas and have been expertly renovated, they often appreciate in value more quickly than non-turnkey properties. Finally, because they are fully renovated, turnkey properties tend to attract higher quality tenants than properties that need work. This means that you can expect fewer vacancies and less wear and tear on your investment over time.

On the downside, however, turnkey properties can be more expensive than other types of investment properties. And because they are often located in high-demand areas, they may also be more difficult to find—meaning you could end up paying morefor a property that doesn't exactly meet your needs.


Turnkey Properties vs. Fixer-Uppers

One of the most common questions we get from potential investors is whether it's better to invest in a turnkey property or a fixer-upper. While there are pros and cons to both options, we often recommend turnkey properties for beginning investors for one simple reason: they offer a lower risk option with a higher potential return.

Investing in fixer-uppers can be profitable, but it's important to remember that those profits are not guaranteed. You could easily pour money into a property only to find that you can't sell it for enough to make your investment back—or worse, that you can't sell it at all. With a turnkey property, on the other hand, you know exactly what you're getting and what your potential return could be. Of course, fixer-uppers can offer a higher ROI if everything goes according to plan—but if you're new to real estate investing, people typically tend to believe that turnkey properties offer a safer bet.

Conclusion

If you're considering purchasing a turnkey property, it's important to do your research and weigh the pros and cons carefully. They can be a great option for investors who are looking for a hands-off approach, but they may not be the best choice if you're working with a limited budget. Ultimately, the decision comes down to what's best for you and your specific goals as an investor.

Disclosures
Certain information contained in here has been obtained from third-party sources. While taken from sources believed to be reliable, Getaway has not independently verified such information and makes no representations about the accuracy of the information or its appropriateness for a given situation. In addition, this content may include third-party advertisements; Getaway has not reviewed such advertisements and does not endorse any advertising content contained therein. This content is provided for informational purposes only, and should not be relied upon as legal, business, investment, or tax advice. You should consult your own advisers as to those matters.

References to any securities or digital assets are for illustrative purposes only and do not constitute an investment recommendation or offer to provide investment advisory services. Furthermore, this content is not directed at nor intended for use by any investors or prospective investors, and may not under any circumstances be relied upon when making a decision to invest in any offerings. Charts and graphs provided within are for informational purposes solely and should not be relied upon when making any investment decision. Past performance is not indicative of future results. The content speaks only as of the date indicated. Any projections, estimates, forecasts, targets, prospects, and/or opinions expressed in these materials are subject to change without notice and may differ or be contrary to opinions expressed by others.
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