Real estate investment is quickly becoming the most popular strategy for new investors who are looking for safe and tangible ways to make money. Within real estate there are a number of ways in which people can seek to make money, from flipping properties to long term plans. A method of investment which we have seen more and more of in the last decade is the purchasing of Turnkey properties. You may be asking yourself ‘What is a Turnkey property?’ and if so then we are going to clear up any doubts which you may have. Let’s have a deeper look into what these properties are, why they are appealing and how money is made through their use.
In a Nutshell
Basically a Turnkey property is one which is ready to rent out right away, it is a property which has had some money injected into it in order for it to be fit for a tenant, and it is sold in this condition. Turnkey properties started to really gain popularity after the housing market crash in 2007-8, when properties dropped in price and were scooped up by investors. It became easier to liquidate the investment and move on to the next one by getting these properties into livable condition and then selling them on once the market picked up. If the original investor had rented it out their capital would have been tied up for too long.
Benefits of Buying a Turnkey Property
One of the biggest draws of buying one of these properties is that it is an easy way to get started into the world of real estate investment. A newbie may very well have the capital to invest in a property but they can often lack the know-how in terms of how to smartly invest in the property in order to get it ready for tenants to move in. There is also the issue of speed, instead of buying a property and then spending 4-6 months or longer getting the property up to scratch, and investor can make the sale and have people move in right away. Most investors, especially those with careers or enjoying retirement will often use a 3rd party company to manage the rental, which makes the whole affair very hands off. Investors can simply buy the property, and then hand all management over to the 3rd party, allowing them to simply receive rental money each month without any need to spend time or effort on their investment.
Benefits For Sellers
Those who buy these properties and convert them to Turnkey properties do so for quick profits, they can buy a place, use their know-how and their own teams to get the property ready, then liquidate their asset and move on. Because of the high demand of people wishing to get started in this market, the original investors know that they can very easily sell on these properties. Investors will often design and build on these properties using very similar styles and materials, which allows them to buy in bulk and slash the cost of re-upping the property.
Simply put a Turnkey property ensures a win-win for all involved.