How to Buy Turnkey Rental Properties

Turnkey rentals are among the best real estate investments, whether you’re looking for a beginner-friendly investing strategy or aiming to add another “passive” income stream to your real estate portfolio. Keep reading to learn why many investors prefer these properties, how to buy turnkey rental properties (step by step), and what you need to know before getting started!

Summary:

• Turnkey properties are recently built or renovated rentals that often come with tenants and property management already in place.

• These “passive” investments have lower maintenance and repair costs, allowing you to start earning rental income as soon as you close.

• Before buying a turnkey property, you should have an end goal in mind, properly vet the turnkey company, and have a good handle on the management process.

Why Buy Turnkey?

In real estate investing, turnkey refers to a newly built or recently renovated property that you can rent out for a profit. It typically comes with a property manager and tenants in place, leaving you with fewer headaches than a regular rental property. Many investors prefer turnkey properties because they offer the following benefits:

Truly “Passive” Income

Normal rental properties require significant time and effort to manage. Rather than committing several (if not dozens of) hours each week to dealing with tenants, repairs, evictions, and other landlording headaches, buy a turnkey rental! These properties have property management already in place, which means someone else handles tenant requests, rent collection, and operations for you—giving you real, “passive” income!

Fewer Repairs, Higher Profits

Since turnkey rentals are recently renovated or newly built, they generally require less upkeep than other rental properties—especially those that are old or run-down. Paying a fraction of the normal repair and maintenance costs allows you to hang on to even more of your profits!

Day 1 Cash Flow

After closing on a normal investment property, you still need to find tenants, which could take some time (and money). When you buy a turnkey rental, tenants are often already in place. This means you can start earning rental income on day one!

How to Buy Turnkey Rental Properties

If you want to know how to buy turnkey rental properties, the process is relatively easy and not all that different from buying any other property! Just follow these six simple steps:

1. View Turnkey Rentals for Sale 

First, you’ll want to start checking out turnkey real estate and figure out which type of property you might like to buy. Rent to Retirement has a constantly updated list of build-to-rent and newly renovated turnkey properties for sale in some of the best states to buy rental property. Doing some preliminary research will give you a better sense of turnkey prices and the areas you can invest in!

2. Speak with a Trusted Turnkey Provider

Next, it’s time to connect with a turnkey provider, but not just any turnkey provider. This is a sizable investment you’re making, so you’ll want to work with a company that has a proven track record and stellar reviews. Rent to Retirement is the highest-rated turnkey company in the nation, holding a perfect five-star rating across hundreds of BiggerPockets and Better Business Bureau (BBB) reviews.

Book a call to start investing for financial freedom! 

3. Get Pre-Approved

Now that you know your budget and “buy box,” it’s time to get financing lined up (unless you happen to be paying cash!). Remember, most mortgage pre-approval letters are only good for 60-90 days, so you’ll want to act on properties shortly after getting pre-approved. You can work with your own lender or with Rent to Retirement’s trusted turnkey rental lenders.

Did you know Rent to Retirement offers 5% down loans on new build turnkey rentals?

4. Make an Offer

You now know what you can afford and have a pre-approval letter to “prove” it! Now, find turnkey properties you like in markets that work best for your investing goals and start making offers!

5. Prepare to Close

Once your offer has been accepted, you’ll want to move into the due diligence phase and get an inspection done on the property. If everything checks out, coordinate with your lender to ensure they have everything they need from you, and communicate with your turnkey provider up until closing.

6. Build Wealth!

You’ve closed, and the hardest part is in the rearview. From here, sit back as your property manager takes care of your tenants and keeps you updated on the property’s performance. Now that you have one turnkey rental under your belt, you can work on building a portfolio of these “passive” investments!

Tips When Buying Your First Turnkey Rental

The process of buying a turnkey rental is relatively straightforward, but keeping these tips in mind will increase your odds of finding a great investment:

Know Your End Goal

Before you buy any rental property, you should have a goal in mind. Do you want to invest for cash flow, appreciation, or a bit of both? This will help you decide which property to buy and the market to buy in!

Look into Reviews and Referrals 

Not all turnkey companies are made equal. Rather than taking the turnkey provider’s word on everything, make sure you read reviews to hear about other investors’ experiences with them—before you buy!

Rent to Retirement reviews are the highest in the country!

Ask About Management

When you buy turnkey, remember that you’re partnering with not only the provider but also a separate property manager.

Ask the turnkey company how their managers operate. Will they give you regular check-ins with financials? What’s the process when maintenance or repairs are needed? What are their leasing terms? How do they screen tenants? Make sure you’re familiar with the process before you buy!

Ready to Buy a Turnkey Rental?

Are you ready to take steps toward finding and buying your first turnkey rental? You don’t need to look far, as Rent to Retirement has turnkey rentals with strong cash flow potential in high-appreciation markets across the US.

The best part? You may not even need to have 15%-25% saved up for a down payment, as Rent to Retirement offers as little as 5%-down financing on new builds!

How to Buy Turnkey Rental Properties FAQs

Are Turnkey Properties a Good Investment?

Yes! Turnkey rentals can be a great investment as they give you all the benefits of ownership—cash flow, appreciation, and tax benefits—without the headaches of managing them. These properties are also easier and more affordable to maintain since they are either newly built or recently renovated!

How Many Rental Properties Do You Need to Make $5,000 a Month?

Let’s say you’re buying turnkey rentals, which regularly achieve a 10% cash-on-cash return. If each property costs $250,000 and you put 20% down on each property ($50,000), you’ll need roughly 12 turnkey rentals to bring in $5,000 a month in cash flow, principal paydown, tax benefits, etc.!

Run the numbers with our free retirement calculator!

Who Is the Highest-Rated Turnkey Provider?

Rent to Retirement is by far the highest-rated turnkey provider in the US. We hold a perfect five-star rating across hundreds of reviews on BiggerPockets, Better Business Bureau (BBB), and other review sites!