You’ve probably come across the term ‘turnkey’ in used property listings before, and the thought of whether this term is a marketing buzzword or a legitimate thing may have also come across your mind. I will explain in details before you buy or start investing in turnkey homes for investors.
The definition of turnkey homes is very subjective but generally, it basically refers to a completely renovated home that is ready to move in. So an investor can purchase it and immediately rent it out.
Typically, turnkey homes will never require you to pay upfront costs for updates or repairs, which essentially means you can buy it and use it immediately.
But as an investor, how do you know if it is worth investing in such a property? We talked to Turnkey Military, Fayetteville, NC and they shared some valuable pros and cons that will help you make an informed decision.
Pros of Investing in Turnkey Homes
- As with any kind of investment, there are always advantages and disadvantages. Let’s look at some of the positive points of investing in turnkey homes.
Quick Return on Investment
- Since turnkey properties are move-in ready, as an investor, you will be able to see an immediate return on your investment because tenants can move in right away and start paying you rent. You don’t even have to pay any upfront costs for upgrades, renovations or repairs.
Furthermore, some of these homes are already occupied by tenants when they are sold which makes it even easier to get return on your investment. When you deal with such properties, they are always in high demand because the tenant can move in and never worry about any updates. Plus they get modern features and amenities right from the start.
It Diversifies Your Portfolio
- A turnkey property added to your portfolio of investments will diversify it by type and location. These properties allow you to invest in areas outside of where you are currently living which means that you can explore other markets for growth even when your local market is in decline.
Saves Time and Effort
- Homes like these will require little to no work to get them up and running so it is safe to say that these are sold as ‘passive income’ investments. This means that all the parties that are involved prior to the investment have already likely handled the time-consuming processes.
These processes include appraisals, inspections, procurement, and title search. You even have the option of giving the property to a turnkey home management company for a completely hands-off investment.
Cons of Investing in Turnkey Homes
- These homes also come with a list of disadvantages that you need to consider before investing in them. Here are a few to help you make an informed decision.
You Can’t Personalize The Property
- By investing in Turnkey property, you will have very little control over the personalization. This means that you will not be able to change the layout, appearance, landscaping, and the appliances within the home.
Because the home has already been renovated and updated for immediate use, it is not suitable if you are buying it to move-in yourself.
The Price is Premium
- Since these properties are updated and are typically found in premium condition, they will be priced higher than other properties in any given market. This means that you will have to make a higher investment initially which means the complete ROI will also take time.
Where to Find Good Turnkey Properties to Invest In?
- If you’re looking for the best turnkey homes, then consider investing in military neighborhoods regardless of which area you plan to invest in. Homes in these neighborhoods are valued average 34.8% more than other properties and there are more long-term renters available.
Contact Turnkey Military and we’ll help you find the best investment in North Carolina or in an area of your preference.