6 Common Misconceptions About Turnkey Properties
For many first-time investors, getting involved in turnkey real estate seems too good to be true. Can you earn a steady income from a property that you put very little time and effort into finding and maintaining? Can you reap the benefits of turnkey real estate investments without sacrificing time with your family? There are many questions a first-time investor may have about turnkey properties, and there’s no shortage of helpful articles and resources to help you navigate the process. But how do you know what information is credible and what’s just a myth? As a new investor, you can get bogged down with information and advice from people who have done it before. Separating the myths from the facts can be hard. Here are six common myths about investing in turnkey real estate to clear it all up for you right now:
It Takes a Lot of Time
Many investors love the idea of generating passive income via turnkey real estate but don’t think they have the time to commit to making it work. One common misconception is that real estate investing is a full-time job. But thanks to professional management teams and realty groups, you can pass off most of the major day-to-day obligations instead of spending time doing them yourself. The beautiful thing about turnkey investments is that your level of involvement is entirely up to you. Since most of the work is done before you even show up, you can focus on your family, current job, and hobbies while earning a steady stream of income on the side.
All Turnkey Properties Are in Bad Neighborhoods
This is one of the biggest myths that turns hopeful investors away from turnkey properties. They hear one horror story about someone who bought a turnkey property that turned out to be a lemon in a bad part of town and assume that this is a common practice. Of course, there are always going to be shady sellers who attempt to sell bad homes in bad areas to unsuspecting investors.
There are great homes in bad areas and bad homes in safe areas.
Location is very important! You can spend thousands fixing up a home to make it comfortable, but if it is in a dangerous area, you’ll have a hard time getting people excited about living there. The best way to ensure you’re getting a home in a good area is to have a firm understanding about property classes. If you can spot the characteristics of a C-class property, you won’t fall for a less than honest seller who tries to convince you otherwise. If you’re looking at an A or B-class property, chances are you’re in a decent area that people will feel safe living in.
You Need Experience in Real Estate
Turnkey real estate is one of the best options for first-time investors. By having the acquisition and rehab of the home already done for you, you’re skipping a lot of the time-consuming details that can bog down a first-time investor. Although you should educate yourself on the basics of real estate investing, listen to some podcasts, and read everything you can get your hands on. The best way to learn about investing to get into it. Turnkey real estate enables investors to see the benefits of a successful investment without having to know the ins and outs of every step right away.
It’s Best to By Turnkey Properties Locally
One of the things investors love so much about turnkey real estate is that they have options when it comes to where they buy their property. Investors who live in an area where the market is slow aren’t confined to buying property close by. Indianapolis and Jacksonville are hot markets for turnkey real estate; the homes are cheap, and the area is highly desirable. Turnkey real estate makes it easy to get a profit from a long-distance investment and doesn’t require your constant presence to run smoothly.
Turnkey Properties Are Totally “Hands Off” Investments
Everyone talks about how easy turnkey properties are and how they take the stress and hard work out of investing. Although this is true, to be successful in any real estate investment, you have to be involved. When you buy a turnkey property, you bypass the home acquisition process and the rehabbing steps, and can even avoid the tenant search and screening part.
Acquiring multiple turnkey properties is a smart way to build a steady stream of passive income, but real estate is all about appreciation and making money over time.
However, to see a steady stream of passive income, you have to get involved. This means making sure the home is running smoothly, whether you take care of the issues yourself or hire a competent team of real estate professionals. You should check in with tenants periodically to build a professional relationship, and have a system in place that allows you to get regular updates on the status of the home.
You’ll Get Rich Right Away
Investing in real estate is a proven way to build wealth, but it doesn’t happen overnight. Acquiring multiple turnkey properties is a smart way to build a steady stream of passive income, but real estate is all about appreciation and making money over time. Investing in turnkey properties is a marathon, not a sprint. It’s about making smart financial decisions that will deliver low risk high return investments in the long run.
Although you don’t need an advanced degree in real estate to make money in real estate, doing your homework and educating yourself on the process never hurts. Surround yourself with seasoned investors, ask questions, get sound real estate advice, and don’t be afraid to get out there. You don’t have to have a lot of time or money to get started. You just need self-discipline, a passion for real estate, a willingness to learn. And, of course, a down payment. Don’t let your lack of experience deter you from getting involved. Turnkey properties are excellent first steps in the exciting world of real estate investing.
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