Turnkey real estate investing is one of the most misunderstood investment strategies. Some investors think these properties are totally passive, while others believe they’re sold at above-market value. In this article, we’ll clear up some common misconceptions about turnkey rentals so you can make better investment decisions!
Summary:
A turnkey rental property is a newly built or renovated property that often comes with professional management (and sometimes tenants) in place. Rather than having to go in, perform renovations, and find tenants, you can purchase one of these properties and start earning rental income right away!
The term turnkey describes a property that can be rented out immediately. Unlike a fixer-upper or distressed property that might require thousands of dollars and several months for renovations, turnkey rentals do not require any repairs or maintenance early on. This allows you to have the unit rented out and bring in rental income sooner!
Turnkey properties are often worth it, depending on the investor’s specific needs and long-term goals. If you want a rental that gives you more passive income than many other properties and an asset you can invest in from afar, a turnkey rental could be the ideal fit!
Some investors are drawn to turnkey rentals because they promise a simpler path to real estate investing. While this is true, there are also many misconceptions about these properties and how they work. Here are some of the most common myths about turnkey rentals:
Turnkey properties are more passive than self-managed rentals or value-add properties, but no rental property is 100% hands-off. While you may have minimal repairs and a property manager handling your day-to-day, you’ll still need to manage the asset by reviewing financial reports and monitoring its performance. Thankfully, this kind of workload is minimal and very manageable alongside a busy W-2 job!
Many assume turnkey real estate companies price their properties above market value, but providers that buy properties in volume are often able to acquire them at below-market prices unavailable to individual buyers. Plus, turnkey properties don’t have the same contractor fees and holding costs as a property that needs work!
Experienced investors with proven systems, processes, and resources may be able to get better returns from a self-managed property, but for a new investor, DIY investing mistakes can wipe out years of returns. Turnkey providers help you avoid this with a low-maintenance, professionally managed product!
While you’re not adding equity with renovations, turnkey rentals often give you “walk-in” equity. Because Rent to Retirement purchases properties at volume, we can secure below-market pricing and pass it on to investors.
Did you know Rent to Retirement offers 5%-down financing on select new-build turnkey rentals?
Many people assume that a brand new or updated rental property will fall outside their price range, or that they’ll have to buy the rental property in cash—neither of which is true. There are turnkey properties available at affordable prices, and you can use leverage to purchase them. Put 20% down (or less) with financing options like conventional loans, DSCR loans, and Rent to Retirement’s 5%-down financing for select new builds!
Like any property, a turnkey rental requires routine maintenance. Although, thanks to it being recently built or rehabbed, maintenance and repairs are heavily delayed!
With any property, including turnkey rentals, there’s always the risk of tenants moving out, not paying rent, or being evicted. However, turnkey rentals come with management in place, meaning you have a professional screening tenants, collecting rent, and working to keep your unit(s) rented!
You can get very different levels of service and product quality from one provider to the next. Pay close attention to renovation standards, tenant screening processes, management practices, and fee transparency when vetting a turnkey provider. Steer clear of red flags like all-cash requirements, no inspection access, or high prices in poor markets!
Rent to Retirement reviews rank as some of the highest in the industry.
Returns aren’t guaranteed with any investment, and a turnkey property is no different. However, Rent to Retirement works hard to mitigate real estate investing risks by focusing on cash-flowing properties in growing markets!
Turnkey is a structure, not a property type. You can have turnkey single-family homes, multifamily properties, new construction, and commercial properties!
Browse cash-flowing turnkey rentals in top investing markets!
Like with any real estate investment, location is key. The same type of property can perform in one market but underperform in another due to factors like rental demand, population growth, the job market, and home and rent prices. This is why Rent to Retirement handpicks markets with strong fundamentals!
When choosing a turnkey market to invest in, clearly define your criteria and stick to it! Generally, you’ll want to target areas with strong population and job growth, solid rental demand, landlord-friendly legislation, and high rent-to-price ratios.
Not all turnkey companies operate the same way, so it’s crucial to choose the right one for your investing needs. Rent to Retirement has a small team that works closely with you before, during, and after your purchase to ensure you’re set up for success!
Before working with any turnkey provider, you should know exactly what you’re getting into. Pay attention to the company’s track record, online reviews, fee structure, and property management protocol. Also, be sure to check the property’s financial projections and performance data against your own analysis!
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Green Flags |
Red Flags |
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Multiple financing options offered |
All-cash purchases required |
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Inspection and appraisal access |
No inspection or appraisal access |
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Transparent fee structure |
Hidden or excessive fees |
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Ongoing post-sale support |
No contact after transaction |
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Verifiable investor reviews |
Unverifiable testimonials only |
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Properties in high-growth markets |
Cheap homes in declining areas |
Do you want all the benefits of direct ownership with more passive income and fewer headaches? Turnkey rentals can be a great option—especially for the investor who works a busy W-2 job or wants to invest out of state—if you work with the right turnkey provider.
Rent to Retirement is one of the nation’s leading turnkey providers. We hold a perfect five-star rating across 330+ reviews on BiggerPockets and have turnkey properties for sale in some of the best places to buy a rental property!
A turnkey property is a newly built or fully renovated property you rent out to tenants. This type of rental property is often professionally managed and may already have tenants in place, allowing you to invest in real estate remotely and generate income right away!
Yes, for the person who wants more passive income, diversification across markets, and a faster path to cash flow, turnkey properties can be great investments. However, you can have the right strategy and still lose money by choosing the wrong provider, market, or property. Make sure you do your due diligence!
The best markets for turnkey rental properties usually have strong rental demand, positive population and job growth, landlord-friendly laws, and properties with good rent-to-price ratios. Rent to Retirement operates in growing, cash-flowing markets across the U.S.!
Yes! Many investors put a 20% down payment on a turnkey property and get a mortgage for the balance. Rent to Retirement even offers 5%-down financing on select new builds, allowing you to get into your next rental property with much less money out of pocket!