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What is a Turnkey Property: A Guide For Real Estate Investors

Written by Than Merrill

In recent years, the real estate market has seen a significant uptick in the popularity of turnkey properties. For many budding real estate investors, understanding what is a turnkey property has become crucial to navigating the investment landscape. This guide delves into the nuances of turnkey properties and why they’re gaining traction.

What is a Turnkey Property?

At its core, a turnkey property is a home or an investment property that’s ready for immediate use. Think of it like purchasing a brand-new car: you just have to turn the key, and it’s ready to go. Unlike traditional real estate investments, which might require renovations or upgrades, turnkey properties come equipped for immediate habitation or rental.

For example, imagine buying a home that has just been renovated with modern fixtures, has no outstanding repairs, and even comes with a reliable tenant already in place—that’s the allure of a turnkey property.

The Appeal of Turnkey Properties

Why are Turnkey Properties Gaining Popularity?

Turnkey properties resonate with modern-day investors due to their convenience. As the pace of life continues to accelerate, more investors seek passive avenues to grow their wealth, and turnkey properties fit that bill.

  • Move-in Readiness: The ability to have a property that requires no further investment of time or money after purchase is alluring. It streamlines the process, making it easier for investors to expand their portfolios rapidly.

  • Lack of Required Renovations: Renovations can be time-consuming, expensive, and full of unforeseen challenges. Turnkey properties eliminate this concern, especially attracting investors who don’t have hands-on experience with renovations or simply don’t want to deal with the fuss.

  • Predictable Returns: With many turnkey properties, especially those that come with existing tenants, investors can start seeing returns almost immediately. There’s no lag time, which can be especially appealing to those looking for quick cash flow.

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Benefits of Turnkey Properties for Real Estate Investors

Ready to Rent

One of the primary appeals of a turnkey property is its immediate rental potential. This is particularly beneficial in high-demand rental markets where vacant properties can quickly find tenants.

Professional Renovations

High-quality turnkey properties often come with professional-grade renovations. These aren’t mere cosmetic fixes but substantial improvements that enhance the property’s value and appeal. Updated kitchens, refurbished bathrooms, and modern fixtures can increase rental rates and decrease vacancies.

Minimal Initial Effort

Navigating the property market can be daunting for novice investors. The learning curve can seem steep, with challenges ranging from understanding property laws to gauging renovation costs. Turnkey properties offer an easier start, reducing the number of initial hurdles and fast-tracking investment returns.

Inbuilt Property Management

Many turnkey properties are sold by companies that also offer property management services. This dual-service approach means that new landlords can enjoy a more hands-off investment, assured that professionals are maintaining their property and managing tenant relationships. However, not all property management companies are built equal. Read up on how to find the right property manager to prevent any potential future issues.

Things to Consider Before Investing in Turnkey Properties

Due Diligence

While turnkey properties offer convenience, it’s essential not to dive in blindly. Investors should:

  • Research the Property Provider: Understand the reputation and track record of the company selling the property. Read reviews, ask for references, and ensure they have a history of delivering quality.

  • Visit the Property: Photographs and virtual tours can be misleading. It’s always a good idea to visit the property personally or hire a trusted representative to assess it.

Cost Analysis

Convenience usually comes at a price. Investors should:

  • Compare Costs: Ensure that the premium paid for a turnkey property is justified. Calculate potential rental income against the purchase price and ongoing expenses. It might be more economical to buy a fixer-upper in some cases.

  • Factor in Ongoing Costs: While turnkey properties might be ready to rent, they aren’t devoid of ongoing expenses like property management fees, maintenance, and potential vacancy periods.

Property Management

Some investors mistakenly believe that turnkey always means fully managed. This isn’t always the case:

  • Inquire About Management: If the property doesn’t come with management, investors need to assess whether they have the time and expertise to manage it or if they need to factor in the cost of hiring a property management company. Following expert property management tips is key if you decide to landlord the property yourself.

  • Understand the Terms: If the property does come with management, understand the terms. What percentage will the management company take? What services will they provide? What will be the investor’s responsibilities?

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How to Identify a Quality Turnkey Property

Research the Area

  • Demographics and Demand: Understand the type of tenants the area attracts. For instance, properties near universities may cater to students, while those in suburban areas might appeal to families. Also, consider local amenities, crime rates, schools, and public transport accessibility. A good location will always be in demand, ensuring consistent rental income.

  • Historical Data: Look at property value trends over the past few years. Areas with consistent appreciation indicate a stable market, which is essential for long-term real estate investments.

Thoroughly Inspect the Property

  • Professional Inspection: Always have a licensed inspector examine the property. They’ll identify potential structural issues, plumbing or electrical problems, or other concerns that might not be visible to the untrained eye. A home inspection checklist can help you prepare to walk the property with a professional.

  • Review Renovation Quality: Not all turnkey renovations are created equal. Ensure that the work done on the property is of high quality. Cheap fixes can lead to expensive problems down the line.

Understand the Financials

  • ROI Estimation: Calculate your expected return on investment. Factor in the property’s purchase price, expected rental income, and ongoing expenses such as property management fees, insurance, taxes, and maintenance.

  • Transparent Pricing: Ensure that there are no hidden fees or unexpected costs associated with the property. A reputable turnkey provider should be transparent about all costs involved.

Common Misconceptions About Turnkey Properties

Turnkey Means No Work is Needed

One of the primary appeals of a turnkey property is its immediate rental potential. This is particularly beneficial in high-demand rental markets where vacant properties can quickly find tenants.

All Turnkey Properties Are Expensive

While turnkey properties might have a higher upfront cost due to their renovated status, this isn’t a universal rule. Prices vary depending on location, size, and the quality of the renovations. It’s essential to shop around and compare.

Turnkey Properties Always Come with Tenants

A common misconception is that all turnkey properties come with pre-existing tenants. This isn’t always the case. While many do, ensuring immediate rental income, others are vacant, allowing the investor to choose their tenants..

Turnkey Properties Are Only for Novice Investors

While beginners in the real estate market might find turnkey properties appealing due to their simplicity, they’re also an attractive option for seasoned investors looking to diversify their portfolio without the hassle of renovations.


Understanding what a turnkey property is can be a game-changer for real estate investors. By providing a simpler, more immediate avenue for returns, they’re an attractive option for both new and seasoned investors. As with all investments, thorough research and due diligence are key. Embrace the opportunities turnkey properties offer, but always make informed decisions.

Insurance for Rental Properties

As a landlord, having good property insurance is vital if any issues were to arise.

Limit your risk with the National Real Estate Insurance Group. Explore their tailored insurance solutions to shield your turnkey investment comprehensively. Click here to get a quote and ensure your rental property is backed by expert coverage and support.

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