The word ‘turnkey’ has been very frequently used in the recent times especially after the global economic downturn in 2007 which saw most real estate properties lose their values with one of the highest levels of foreclosures in the modern history of the United States housing industry.
Many practioners in the real estate industry use this term ignorantly and claim to provide turnkey properties for investors. Even real estate agents claim to be involved in turnkey property business.
Well, this section will clearly define and articulate what attributes are expected of a truly TK property investment and what investors should be looking out for to avoid costly mistakes that most people make when investing outside their locations.
Turnkey property investment speaks to the process whereby a professionally renovated, inspected and certified rented property is made available for an investor to buy with property management in place and the property generates cashflow from the day of closing.
What this implies is that some characteristic are expected of any TK investment which includes the following:
- Property is renovated and certified by professionals
- Property is occupied/rented before offer to an investor
- Property management is in place
- All work has been done for the investor
- Investment begins to generate cashflow on day of closing
- No upfront lease up fees since the property is already tenanted
TK business is for investors and not landlords. A landlord is involved in the day to day running of the property; he may be involved in screening and on-boarding of tenants; gets midnight tenant calls on repairs and house maintenance, chases rent collections and issues receipts; etc. He is emotionally attached to the property and may make wrong judgment calls which may be inimical to the health of the business.
An investor is not like that: he carefully researches the location for the investment and chooses a location with right real estate investment fundamentals (fortunately, in our TK project, this burden is taken off you), and invests strictly based on the numbers. The TK provider does ALL the work while the investor just receives the monthly pay check in his account. He is left with ample time to pursue whatever life style he chooses.
The TK provider has property management in place that ensures that not only is the monthly pay check received by the investor, but also that the property is properly maintained through periodic spot checks on the tenants.
This allows the investor to live where ever in the world he wishes to live and only invests in locations where the numbers work.
If you live in locations where investment properties are very expensive, a TK property investment will be an excellent option that allows you exploit opportunities outside your location. Even if you live in areas with good ROIs and do not want to be involved in the hassles of daily property management, TK property investment frees your time to focus on other things that really matter to you.
If you are a busy professional without ample time on your hands, you can still realize your dream of investing in real estate with TK project.