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In the world of real estate, there are many terms that can be confusing to those just starting out. One concept within real estate that you may or may not have heard of is a “turnkey home”.
Now, you may be thinking…what exactly is turnkey home?
It’s exactly as it sounds — a home you can just turn the key in and step into. Turnkey homes are ready to go from the start, so you don’t have to spend time fixing them up and getting them livable.
What Is a Turnkey Home Meant For?
More often than not, turnkey homes are meant for real estate investors who want to add a rental property to their portfolio. You are probably familiar with what a fixer-upper is, but turnkey home is the exact opposite. Usually, people buy them so they don’t have to put too much into the renovations and repairs. Turnkey homes are great if your someone who simply wants a return on your investment, but not so much if you want to take on all the creative challenges that come within renovating a home.
You may be wondering if a turnkey home is an easy way for someone to slide into the position of a real estate investor. The answer is, they’re great options for people who want to invest in property but don’t know where to start. A new or small portfolio could benefit from a turnkey home, which could have a tenant in it almost immediately when compared to a property that needs repairs.
Who Should Buy a Turnkey Home?
All-in-all, turn-key homes are a great type of investment for people who may not have a lot of money to dedicate to repairs or those who have little experience with renovations. Typically, turnkey homes don’t have any unique features, so if you’re the type of investor who likes to put a personal touch on your properties, you’ll have to make do without or find another way to incorporate it.
Before seeking a turnkey home, you should always try to find rental properties in a place where housing isn’t readily available to people, as it’ll be in higher demand. When you choose an area that doesn’t have a lot of rental housing options, you may be able to find tenants even faster — and you can respond to them right away with your turnkey home.
With the rise of telecommuting, many people are choosing to work from a home that best suits their needs, even if that’s far away from where their job is based. To review what a turnkey home is, it is usually something you can typically purchase without seeing the area. If it’s not in a desirable area, you may not see as many people wanting to rent. Remember, you should always to do your research and ask realtors in the area to make sure you’re getting a good deal.
Why Should You Invest in a Turnkey Home?
Turnkey homes are absolutely worth the investment if you can afford them. They may be a bit pricier than homes that need fixing, but if you don’t want to put forth the effort to manage repairs, they’re worth the price.
1. Passive Income Opportunities
Passive income is important to have if you’re concerned about financial stability. Having another stream of income ensures that you have some form of financial security and can potentially withstand any unemployment. Lastly, income opportunities can also give you money to save and store away, then use it to build generational wealth for your children and their children.
2. You Don’t Have to Do Anything
Turnkey homes are popular because they require low effort on the buyer’s part. Once the house is yours, you’re ready to rent it out. It’s move-in ready, with no renovations, repairs or painting necessary. Some turnkey homes are even already furnished for future tenants, but you should always check with the seller beforehand to see if any furniture comes with the house.
3. Out-of-State Investments
If you’re already an investor, you’ve probably been sticking to the same general area that you live in so you can see the properties often. Turnkey homes allow you to purchase something in another area, maybe even one you’ve never visited.
If you choose to invest in other cities and states, you can diversify your real estate portfolio. By doing so, you will narrow down your portfolio which lead you to appear like more of a professional in the world of real estate. Overall, investing in a turnkey home might be the best way to beef up your real estate investments.
Turnkey Homes Are a Great Jump into Real Estate Investing
Whether you’re a seasoned investor or one looking for your first property, you could benefit from purchasing a turnkey home. It’s an easy way to get started in real estate, whether in your area or somewhere else.
Before you start looking for a turnkey home, be sure to research other markets if you plan to buy in a place you’re unfamiliar with. You never know when you could be getting a better price elsewhere. Still, turnkey homes remain one of the best options for both novice and experienced investors.