Becoming a real estate investor is one of the most practical ways to start earning a passive income. Of course, high-yielding investments never come without risks. More importantly, you must be in a financial position to be able to afford a new rental property.
For this reason, some investors consider buying distressed properties, fixing them up, and flipping them for a profit. However, this one-time payoff isn’t guaranteed. Furthermore, you never know what you’re getting into when you buy a property as-is.
For these reasons, we think turnkey rentals are the way to go. Turnkey rental properties are those that have already been repaired, renovated, and updated. As the name suggests, they’re ready for tenants as soon as you invest in the property.
In other words, you can start collecting a rent check immediately. Check out our turnkey rental guide for everything you need to know about these incredible real estate investment opportunities.
The Types of Turnkey Rental Real Estate
As a prospective real estate investor, you probably already know that there are countless types of property you can invest in. For example, there are single-family homes, multi-family homes, and large residential complexes, like apartment buildings.
On the commercial side of real estate investing, there are even more options. For example, the various industries in which you can find turnkey rentals include:
- Retail stores
- Recreational complexes
- Healthcare facilities
- Office buildings
- Industrial buildings
- Shops and garages
- And more
You need to figure if you’d be better suited for a residential property or a commercial property. Then, you can start getting into the finer details of what type of real estate you want to invest in.
Your Potential Duties and Responsibilities of Being a Landlord
Once you determine the type of turnkey rentals you’re interested in, you should do some research about being a landlord. There are legal rights and responsibilities that you must abide by to manage your property within the confines of the law. There are certain standards and services you must provide your tenants.
Furthermore, you will be governed by law regarding things like collecting rent, raising rent, evicting tenants, handling complaints, and more. You need to know in explicit detail what your duties and responsibilities will be once you become a landlord.
Just as importantly, you need to know your rights. For example, what can you do if your tenant is late on payments? What if they violate the rules and policies outlined in your lease agreement?
The Costs of Investing in Turnkey Rentals
Next, let’s talk about your costs as a real estate investor. When investing in turnkey rentals, your initial costs will be somewhat higher.
This is because all of the renovation work is already complete. You won’t have to do anything to get the property ready for potential tenants. However, offering a prime rental property also means you can charge more for rent, which equates to higher profit margins.
But what can you expect in terms of your monthly and yearly expenses? Depending on the property, you could be looking at:
- HOA fees
- Property taxes
- Insurance
- Utilities
- Services
- Common area maintenance fees
- Maintenance and repairs
- And more
Now, your tenants may cover some of these costs (like HOA fees, utilities, and services), but it ultimately comes down to your lease agreement. Some landlords cover utilities to attack more tenants. However, that’s hundreds of dollars a month that will come out of your revenue.
Get Preapproved for a Loan
Understanding your personal budget and affordability is an important step. For example, you need to know that you can afford the costs of the property if you don’t have a tenant. If your property sits empty for several months, it shouldn’t put you at risk of going bankrupt.
However, you also need to verify your loan eligibility with your bank or lender before moving forward in the search for turnkey rentals. Getting preapproved will tell you exactly what price range you should be shopping under.
You don’t want to put an offer down on a property only to find out you’re not qualified. In some cases, you might need to improve your credit score before you can get the property you desire.
Find a Turnkey Real Estate Provider
Of course, one of the most important things to consider when looking for turnkey rentals is the source. Where can you find turnkey rental real estate and through what providers?
This can be a difficult task. While hiring a real estate agent is a good way to go, you shouldn’t just buy residential homes from private sellers. Private sellers have a tendency to hide unflattering things about their homes, which can range from cosmetic damages to structural issues.
Instead, consider searching for vetted, quality-controlled turnkey properties. Check out our available inventory to take a look at the types of properties you can find through our team.
Start Marketing Your Rental Property
Once you find the best turnkey rentals based on your real estate goals and budget, you’re just about ready to start collecting rent. However, your property isn’t going to fill itself. You’ll need to do some marketing to find tenants for your rental property.
There are countless ways you can do this. You can post your rental unit in the local paper, which will also appear on the newspaper’s website. Additionally, social media can prove to be a valuable platform for showcasing rental properties.
Alternatively, you should never discount traditional methods, like putting up a “for rent” sign in the yard of the property.
Look Into Property Management Services
Finally, understand that the duties and responsibilities of owning turnkey rentals can pile up. Managing a rental unit can become even more difficult if you still work a full-time or part-time job. Similarly, when you start investing in other properties, it might feel impossible to keep up with all of them.
In these situations, consider hiring our property management services. We can cover all of the major tasks of being a landlord. This includes rent collection, evictions, advertising vacant units, maintenance and repairs, and more.
Ready to Start Looking at Turnkey Rentals?
If you’ve been thinking about investing in real estate, you can see that turnkey rentals are highly beneficial. Imagine being able to buy a property, find a tenant, and start making money as soon as possible.
We hope our turnkey rental guide answered the various questions you have about this type of property investment. But if you need more information, look through some of our other articles. When you’re ready to move forward with your dream of being a property owner, let us know, we can help you make it happen.