Are you looking to invest in a Memphis property? Are you wondering about the benefits of a turnkey home?
Some investors are looking for properties they can fix up and turn over for a profit, while others are looking for homes in tip-top shape they can rent to reputable locals.
What is a turnkey property, and why should you purchase one?
Let’s take a look.
What is a Turnkey Property?
A turnkey property is move-in ready. If someone wishes to live in one, they won’t have to do anything other than turn the key and move in their furniture.
Turnkey properties don’t require any major repairs or improvements before they’re suitable for dwelling in. Much of the time, they won’t even require a fresh coat of paint. Sometimes they are even available fully furnished.
In some shared situations, turnkey properties also come with fully-stocked pantries or scheduled cleaning services.
Turnkey properties became popular during 2007-2008 because there was a decline in housing values and it was easier for folks to purchase homes than to rent them. These properties are often preferable for busy young professionals or to those who have no home improvement skills. They save time and hassle by purchasing homes that don’t require any extra investment of time or expertise.
Purchasing a turnkey home may also enable buyers to skip tricky parts of the home-buying process, including inspections and appraisals. While it’s possible to purchase older or distressed homes for a lower price, the costs of contractors, supplies, and repairs can become quite high.
Turnkey properties are popular with millennials because they want to move in right away and begin their lives in their new homes.
What Are Turnkey Property Advantages?
Many investors prefer turnkey properties, especially if they’re living out of state. They can have a steady stream of income without needing to worry about maintenance needs that they can’t attend to in person.
Many investors prefer turnkey properties because they can make the property available to tenants right away. They can start generating revenue as quickly as possible.
Anyone who has owned an investment property before knows that the time spent rewiring electrical units, repairing plumbing, and fixing floors can really add up. It takes a tremendous amount of time and money to get things in working order. These make turnkey properties an excellent choice for those who wish to rent their property out.
Owners of turnkey properties enjoy low vacancy rates. It’s easier to find tenants because you’re able to offer them many modern features and amenities.
Turnkey properties also make it easier to invest in areas outside of where you live because you won’t need to attend to maintenance needs. This can help you diversify your portfolio and allow you to invest in growing markets even if your local real estate scene is experiencing a downturn.
How Do I Purchase a Turnkey Home?
You may be able to locate real estate agents who specialize in turnkey homes in various neighborhoods. Ask folks in your desired neighborhood to recommend such agents on social media sites. Make sure you ask questions about their experience and reputation.
Many experts suggest that you view any properties of interest in person before investing. This is the case even if it means driving or flying to another city. This will give you an excellent sense of the building, the amenities, and the neighborhood.
Unlike stocks, real estate can take a while to sell. Values can also fluctuate based upon a number of other factors, such as property taxes. It’s important, therefore, to have a physical representation of your investment before you commit.
Many experts also recommend getting an inspection done even if your property is turnkey. Some features of the home, such as the furnace and roof, may not be as easy to assess on your own.
It’s also important to know your property manager if you’re going to invest in a turnkey property that isn’t in your neighborhood. These folks will be responsible for things like maintenance and building cleaning if you can’t make regular visits. They may also be interviewing prospective tenants and signing leases.
Find out how much experience your property development agency has. You may also be able to view their monthly and annual financial statements. It’s also important to know how quickly they can find new tenants.
How Can I Finance a Turnkey Home?
Once you’ve found a home and property management company you’re sure will be a good investment, you’ll want to be certain of the terms of your type of ownership. Some common ones are limited liability companies, real estate investment groups, and partnerships. Research each one carefully and make sure you’re comfortable with the details.
It’s important to finance your property when interest rates are low. Some common options available at banks and mortgage lenders are 30-year and 15-year fixed mortgages. You can also get Veterans Affairs or Federal Housing Administration Loans.
Longer loans will get you to lower monthly payments but higher interest rates. You can enjoy lower interest rates if you qualify for government assistance loans. Talk to a bank or mortgage broker about the best option for your situation.
Making the Move
What is a turnkey property? In short, it’s a pristine, maintenance-free home that will give you plenty of advantages as an investor. As long as you do your research, you can be on your way to a healthy stream of income in no time.
Don’t stop getting smart about investing in turnkey real estate now. For more information on excellent rentable properties in the Memphis area, schedule a call today.