HOW TO BUY A TURNKEY RENTAL PROPERTY
A turnkey property can be a great investment for a busy person who doesn’t have the time or interest in renovating a property or finding tenants. It can also be a good option for someone who wants to get started in the rental business but doesn’t want to deal with the hassle of rehabbing a property. While turnkey properties can be more expensive than fixer-uppers, they can also be more profitable in the long run because you won’t have to put any money into repairs or renovations. And, if the property already has a tenant in place, you can start generating income right away. So, if you’re looking for a low-maintenance investment, a turnkey property may be the right choice for you.
4 THINGS TO LOOK INTO BEFORE INVESTING IN A TURNKEY PROPERTY
LOCATION
When it comes to investing in a rental property, location is key. Look for neighborhoods where there is a large population of renters and prices are affordable. This will give you a bigger pool of renters, and increase the chances that you’ll find a good tenant. Don’t be afraid to look in locations outside of your current area. Turnkey rentals make it possible to explore a wide variety of locations because there is no renovation or furnishing of the property to be present for. By doing your research and choosing the right location, you can maximize your chances of success as a landlord.
PROPERTY PRICES
One of the most important steps in buying a property is researching current market prices in your chosen location. This will give you an idea of what to expect in terms of price per square foot for properties in the area. There are also other factors that can make a property more valuable than similar properties in the same neighborhood. For example, a property with a view of the ocean or city skyline will be worth more than a property without these features. It is important to consider all of these factors when researching prices in your chosen location.
RENT PRICES
Rental prices are just as important as property prices when you’re trying to make a return on your investment. You need to understand the prevailing rental prices in your target market, so you can gauge whether a property offers the best value for money. Additionally, if you choose a location where rents are rising, you’ll have the opportunity to increase your income in the future. Keep all of this in mind when you’re analyzing different properties, and you’ll be more likely to make a smart investment that will pay off in the long run.
HOUSING STOCK
What happens when there are multiple locations that meet your criteria? How do you choose which one is right for you? One important factor to consider is the quality of the homes in the area. Are they well-maintained? Are there new builds with the latest fixtures and fittings? Are there older homes that need work? Or are there historic buildings with restrictions on renovations? All of these factors can affect your bottom line, so it’s important to choose a neighborhood that has homes that fit your business model. Doing your research up front will save you time and money in the long run.
4 STEPS TO BUYING YOUR TURNKEY RENTAL
STEP 1: SECURE FINANCING
Securing financing is one of the most important steps when you’re purchasing an investment property. If you don’t have the cash on hand to pay for the property outright, you’ll need to get a mortgage. The first step is to find a lender that is licensed to operate in the state or states where you’re looking to buy. This is especially important if you’re looking at properties in multiple states, as each state has its own regulations surrounding lending. Once you’ve found a lenders that can work with you, it’s time to start the application process. This will involve providing documentation of your income and assets, as well as your credit history.
STEP 2: CHOOSE YOUR PROPERTY
There are a lot of factors to consider when choosing a rental property, but with the help of a turnkey property provider, it can be a lot easier. First, you need to decide on the type of property you want to buy. Would you prefer a house or an apartment? How many rooms do you need? Once you have a general idea of what you’re looking for, your turnkey property provider can help you narrow down your options and choose the best property for your needs. They’ll also be able to advise you on which areas are most promising for rental investments and what kind of return on investment you can expect. With their help, finding the perfect rental property can be a breeze.
STEP 3: PROPERTY UNDER CONTRACT
Before you sign on the dotted line, it’s important to do your homework and make sure you’re getting the best deal possible. Once you’ve found the perfect property, the next step is to sign a contract. This document will outline the terms of the sale, including the purchase price, any contingencies, and what will happen if either party fails to uphold their end of the agreement. Along with the contract, you’ll also need to put down an earnest money check, or good faith deposit. This shows the seller that you’re serious about buying the property and helps to secure your place in the deal.
STEP 4: CLOSE THE PROPERTY PURCHASE
Once you’ve found the perfect turnkey property, it’s important to protect your investment by having the property inspected and appraised. An inspection can reveal any potential problems that might need to be addressed, such as structural damage or repair needs. An appraisal will give you an objective estimate of the property’s value, which can be helpful in negotiating a price with the seller. If the inspection and appraisal show the property to be a bad investment, it’s best to walk away and look for another property. However, if everything checks out, you can proceed with confidence to the next step: reviewing and signing the documents to close on your purchase.
Jim Thorpe is a Seattle-based entrepreneur and real estate expert with over 30 years of experience in real estate development. He works to find high-demand properties in low inventory areas for both developers and homeowners alike. One of his specialties is locating single-family homes in property parcels zoned for multi-family development. His rental portfolio now includes houses, apartments, and commercial properties. Thorpe’s dedication to his business has led to city-wide growth and development in the real estate sector.
Summit Capital Partners is a real estate development and management firm that operates out of Puget Sound and is owned by Seattle real estate expert, Jim Thorpe. They work to acquire off-market real estate and specialize in developing risk-adjusted solutions, allowing an assets’ value to increase over 6-12 months. Summit Capital aims to make a difference in the community where they do business.
