Investing in turnkey rental properties can be one of the best investments you ever make in your life. Not only will you be able to generate monthly revenues from the rental payments, but you can also sell it at a later date for profit. And from an investment point of view, that is a pretty sweet deal. So, if you are thinking of investing in turnkey rental properties, then make sure to keep the following tips in mind.
Ensure that you do a full appraisal of the turnkey property before you make a deal. Only then will you be able to correctly gauge the true value of the property. As such, if the seller is not too keen on allowing you to do an appraisal, then that is definitely a red signal. In fact, it can indicate that the seller is actually trying to sell you a turnkey property at a price which is much higher than its real value and that this is the reason why they are hesitant to allow you to appraise the property. So, only look to purchase properties where the seller is okay with you doing an appraisal of your own.
One of the reasons why many people invest in turnkey properties is that the turnkey provider will have done all the necessary repairs and renovations. As such, you will not have to waste time doing such tasks. Instead, you can buy it and rent it straight away. So, make sure to inspect the home to see that it is in perfect condition and ask the seller for the list of repairs and modifications they have made to the house. And in case the community requires homes to have a certificate of occupancy, then make sure that the turnkey provider does have the certificate.
Whether the property management team performs as per your expectations should also be taken into consideration when making investments into turnkey rental properties. After all, they are the ones who will be looking after your property after you purchase it. And no matter how attractive an investment a property might seem, if it is mismanaged, then the value of the property will go down and you will eventually suffer a loss. So, be sure to look at how the management team has handled other properties, their collection rate, staff expertise, and so on. A good management service will ensure that the property is kept in the best possible condition, thereby enabling it to grow in value.
Strength Of The Market
Finally, make sure to check how strong the real estate market of the investment property is. Ideally, the region should have a good enough demand for properties so that your home can be rented out pretty easily no matter the time of the year. So, look at whether the management team can find out renters whenever the house is vacant. And if you sense that the region might see an economic slowdown sometime in the near future, then you should stay away from investing in any rental properties