Are Turnkey Properties Too Expensive to Be Viable Investments?

by Sterling White

Do turnkey investment property services eat up too much profit to be viable as a sound investment strategy?

Can turnkey real estate investing really be profitable? If so, what buying guidelines and criteria should investors have?

Myths & Misconceptions About Investing

Living in the information age can be both a gift and curse if not utilized efficiently. Misinformation is one of the biggest roadblocks and risks to real estate investors. As good as the internet is for accessing more knowledge and data, it has also spawned infinite volumes of misinformation. Even what was meant for good can often be taken out of context or is now outdated.

To bust through these myths to success, investors must do the complete math for themselves and understand that markets, regulations, and trends are constantly in motion.

turnkey-tips

Discounts Hardly Exist

Everyone wants a steal. Of course, in reality most of the time real estate sells for what it is worth in the moment and in the individual scenario. This is true of foreclosures, probate and auction properties, and more. You might find cheaper properties at auctions or if they are in essentially a distressed condition. The tradeoff is needing hefty amounts of cash, being able to complete major rehabs in weeks, and finding the demand for these properties that the previous owner couldn’t.

Turnkey real estate investors are buying into an investment for which someone else (the operator) has put in all the time, work, and upfront cash. They have more than likely invested tens if not hundreds of thousands in learning/education, plus weeks of marketing, organizing, and paying construction crews, finding and screening tenants, and more.

You could do all this yourself. Add up the costs and the hourly cost on your time and see how much that comes out to, including an amount for risk of loss if you aren’t an expert in all of these areas yet.

Now take those numbers and compare buying the raw materials to investing in turnkey properties. It’s like the difference between buying a seed and a plot of land, growing the crop, protecting it, harvesting it, and then finally getting to eat a bowl of cereal rather than ordering Amazon delivery to your door. Which do you prefer? Which offers the best value for you?

Pricing Turnkey Properties

The first thing you want to know about turnkey is what the price is based on. This could include:

  1. Market value based on close by recently sold homes
  2. Value according to the income approach
  3. What it sold for at the height of the 2008 bubble
  4. Build cost
  5. ROI
  6. A random number

You might run into all of these scenarios. Some may give you a small amount of equity going in. Others might be priced over the market for the benefit of the turnkey service.

What’s really important is:

  1. What it is worth to you
  2. Having the flexibility not to get stuck

turnkey-cons

4 Deciding Questions to Ask

  • What’s my time worth?
  • Will I be able to sell if I need to?
  • How well managed are the turnkey properties I am looking at?
  • Is turnkey a fit for my financial plan?

It’s not my position to decide whether turnkey real estate is or isn’t right for you. But I do believe we have a responsibility to ensure that the right information and perspectives are being shared so that each individual can make a fully educated decision for themselves. Do your due diligence and decide if there is a place in your portfolio for turnkey. How will you invest?

Investors: What do you think? Are turnkeys too pricey to be good investments?

Weigh in below!

Interested in Finding out More? Reach out below

Shawn Ireland

Phone: 913-225-6231

Email: Ireland_Investments@yahoo.com

Address: 1415 Main St. #823, Grandview, MO 64030


Website: www.irelandinvestmentsllc.com/

Facebook: @IrelandInvestmentsLLC/

Instagram: @irelandinvestmentsllc

Twitter: @IrelandLlc


Ireland Investments llc

This information is intended only for the use of the intended recipient(s) and it may be privileged and confidential. Please note that any views or opinions presented in this post are solely those of the author and do not necessarily represent those of the company. This is reposted information and is not original thought of Ireland Investments or anyone associated with the business.

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