Turnkey real estate companies are everywhere. You can probably find one in every major city of the U.S. But not all turnkey real estate companies are the same, and it can be difficult to identify the good ones unless you know what to look for. Let’s be honest — anyone can slap a coat of paint on a property, take some compelling before and after photos, pick a tenant out of a hat, and advertise what they do as turnkey investing. But is this the type of turnkey real estate company you want to put in charge of your money? Before you take the plunge and purchase your first turnkey investment property, take some advice and learn what we wish every investor knew about the industry.
With Turnkey Real Estate, Consider the the Market and the Property
When you purchase turnkey real estate, you’re not just investing in the home. You are also buying into the local market. Consider the answers to specific questions, like:
- What are the vacancy rates in the area?
- What is the tenant profile of the neighborhood?
- Are the homes appreciating in value?
If you don’t consider the demands of the local market before purchasing your turnkey real estate, you could be in trouble.
Forbes recently ranked Dallas as the top real estate investing markets for 2017. When building their list, Forbes looked at some key indicators that could assist you in your own due diligence of a market.
Real Estate Key Indicators
- Past and Projected Job Growth
- Cost of Living
- Income Growth
- Projected Economic Growth
While there is no way to predict the future growth or decline of a real estate market, you can still benefit by doing some research on just a few of the markets where you are considering investing. Once you have identified the best market for your investment, focus next on finding the best neighborhood within the market.
Consider the Location
Even in a thriving market like Dallas, home values and property classifications can vary from neighborhood to neighborhood. When looking at potential investment properties, think about some of your own criteria for buying a home:
- Who lives in the neighborhood?
- How are the schools?
- What amenities are available nearby?
- What is the overall tenant quality of other rental homes in the area?
Even though you won’t be living there, these are important questions to answer as an investor. Quality neighborhoods not only attract quality tenants, but the homes in these areas are more likely to hold or even increase in value. Take a step back before deciding on your investment to ensure that you choose a property that will attract quality tenants.
Ask About Renovation Quality
When you purchase a turnkey investment property in a quality market and quality neighborhood, your tenants will (& should) expect a quality home. Before purchasing turnkey real estate, ask the provider about the renovation? Focus on the large expenses, like:
- Has the HVAC been replaced? If not, how old is the unit?
- Has the roof been replaced? If not, how old is it?
- Has the water heater been replaced? If not, how old is it?
Get the picture? It’s easy to be dazzled by before and after photos. Some paint and HDR photography can give the illusion that the property you are purchasing is in pristine condition. So, ask the important questions and make sure the turnkey provider offers a warranty on all repairs that they made, minor and major. You don’t want to be a turnkey real estate investor who constantly spends time and money on repairs.
Profits and Property Management
Investing in real estate is, after all, an investment, so seeing a financial return is the bottom line. The profits that you see each month depend on a variety of factors, including successful tenant placement. When you purchase a property from a true turnkey real estate provider that also offers property management, you are more likely to have a quality tenant placed in your home. The success of a property management company and a turnkey provider rests as much on the quality of the tenant as it does on the quality of the property
Working with a professional property management company will help you avoid costly situations.
Let Property Management Handle These
- Tenant Damages
- Late or Unpaid Rent
It is possible to profit on real estate while outsourcing your property management. Be sure you understand the monthly expenses of working with a property management company.
Real Estate Investing Beyond the Purchase
Find a partner who will stick around after the transaction is finished, especially when purchasing a turnkey real estate investment. When you purchase in a turnkey property, you want a provider who will be there for the life of your investment — through tenant turnover, maintenance, income disbursements, and divesting of your property.
True Turnkey Real Estate Providers Offer:
- Assistance with the closing process
- Recommendations on property management services
- Regular updates on your property
- Support for any issues with your investment
Even if you purchase a quality home, in a quality market, in a quality neighborhood, you may still leave money on the table if you don’t have a good team to support your real estate investment.
Invest in the Hottest Turnkey Real Estate Market
American Real Estate Investments offers aftercare support, guaranteed work and complete property management, all after the sale is completed. We also have an established presence in the hottest real estate markets in the U.S. Contact us to find out how you can begin investing in Dallas/Fort Worth.
Whether you’re a beginner investor looking to finance your first investment, an experienced investor hoping to diversify your retirement nest egg, or an overseas investor entering the U.S. market, American Real Estate Investments has the team to meet all your needs.
Contact American Real Estate Investments to find how you can begin investing in the hottest real estate market in the U.S. Check out our property portal to see our latest investment opportunities.