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The Pros and Cons of Turnkey Property Investing, Explained | If you’re looking for ways to diversify your investment portfolio, the experts agree on one thing: real estate investing is the way to go. Because property values increase over time—and because these investments can be less risky than investing in the stock market—the right property can provide excellent returns.
But if you don’t want to deal with the headache of finding, renovating, and managing a property, you might balk at the idea.
Enter turnkey property investing. This option allows investors to reap the benefits of real estate investing without the drawbacks of the traditional approach. If you’ve been wondering about taking the plunge, here’s what you should know.
What Is Turnkey Property Investing?
Before we get too far into discussions of the pros and cons, you may first be wondering, “But what is a turnkey property?” In essence, a turnkey property is fully-furnished, move-in-ready real estate.
Turnkey property investing is investing in these types of properties, which need no repairs, upkeep, inspections, or appraisals. This makes it easier for investors who want a hands-off approach to real estate investment. Most turnkey providers even manage the property and rentals on your behalf!
The Pros and Cons of Turnkey Properties
This type of investment strategy may sound like a no-brainer—but how can you be sure it’s right for you? There are a few advantages and disadvantages of turnkey properties to keep in mind as you weigh your decision.
Pros
One of the biggest pros of turnkey properties is the low vacancy rates. With move-in ready properties, interested parties have few reasons not to buy—and some properties may even come with tenants! This means you’ll see a faster and more regular return on your investment.
In terms of time, another great advantage is the convenient, hands-off approach to investment. You’ll have to do little to no work to get the property ready for move-in, making it a good passive income stream to have on hand.
Cons
For many investors, the most obvious disadvantage to turnkey property investing is the price tag. These premium properties are updated and renovated—which doesn’t come cheap. However, it does save you the time and expense of paying for repairs and upgrades yourself.
The distance can be another critical factor. Many investors find that the best turnkey properties aren’t in the area where they live, meaning that it can feel risky to make the significant investment—sometimes sight unseen—from far away.
Last, because you’re buying the move-in-ready property as-is, you won’t have control over the structure or appearance. In other words, if you might want to live in the property yourself one day, you’ll have to pay for further renovations.
Decide Whether Investing in Turnkey Properties Is Right for You
Like any other type of investment, turnkey property investing might not be right for your needs or financial goals. However, weighing the pros and cons above can help you decide whether this option will fit into your investment portfolio. After all, it’s hard to pass up on the added convenience and diversification it offers!
Looking for more tips to help you make the most of your finances? Check out our other guides for additional insights!
