If you have ever wanted to dip your toes into the world of real estate investment, turnkey real estate is a good place to start. The ease of entry, combined with the many benefits and passive income opportunities, makes buying turnkey properties a logical choice for both new and seasoned investors.

Despite the persistent housing shortage that has led to increased prices, new construction is on the rise in the United States. Construction Coverage reports that 1.5 million new housing units were authorized in 2024. 

How can you get involved in this exciting real estate investment opportunity? Your guide to turnkey real estate is here.

What Is a Turnkey in Real Estate?

Turnkey real estate is property that is ready for move-in. Buyers can "turn the key" and walk into a fully-functional home that does not require repairs or renovations at purchase.

Turnkey real estate is attractive for buyers who want to spend a little more without the hassle of dealing with problems when they move on. Essentially, the increased price of turnkey properties is due to convenience. 

The Benefits of Turnkey Real Estate

What sets turnkey real estate apart from other types of properties? Here are some of the key advantages that may attract you to purchase turnkey real estate for your next investment.

Save Time and Money 

Since you can rent out a turnkey property right away, you will immediately begin to generate revenue. The longer a home sits empty, the more money you waste. You can begin looking for tenants immediately after you close on the home.

You also will not have to waste time with costly repairs. Major renovations can take weeks or even months to complete, which is a risk associated with fixer-uppers or flipper homes. Turnkey properties do not have those issues.

Location Flexibility 

When you are a new real estate investor, it may be more advantageous to purchase properties that are not in your geographic area. Working with a property management company enables you to find investments all over the country, maximizing your potential profits.

Look for areas that are up-and-coming with new infrastructure and housing developments. Investing sooner will increase your profit margin and give your investment more time to grow. 

A Scalable Investment Model 

Real estate investing can be easily scalable once you purchase your first property. Use the profits generated from your initial investment to fund other properties, creating a scalable business model. With enough properties, you may be able to fund your lifestyle exclusively from real estate investments.

Hiring a property management company means that you can scale your investment with ease. You do not have to worry about taking on too much responsibility, as delegating for a small fee can save you:

  • Time
  • Money
  • Stress

Increased Cash Flow

Since turnkey properties are move-in ready and have little to no problems, you can charge market rate for rent and still attract suitable tenants. Generating a few hundred extra dollars a month can turn into thousands per year, which adds up as you acquire more properties.

Is Turnkey Real Estate a Good Investment? 

Generally, yes, turnkey real estate is a solid investment. Since the homes are new, they are generally less risky than older fixer-uppers that may come with unforeseen issues.

Using a professional management company when you buy investment properties in Memphis can lower your risk and reduce tenant turnover as well. Generating passive income is much less stressful than active investing, especially if you are new to the real estate market.

In addition, real estate tends to be a less risky investment than other pursuits. Real estate usually appreciates, so there is less likelihood that your investment will lose value, especially if you plan to hold the investment for several years or more.

Frequently Asked Questions

Are There Other Ways I Can Invest in Real Estate?

Yes, turnkey real estate is one of many real estate investment opportunities. Real estate is considered a solid investment, but you may want to change your portfolio depending on your risk tolerance and your investment goals. 

Some of the other types of real estate investment include:

  • House flipping: Buying fixer-uppers, investing money to modernize them, and selling them in a short time frame.
  • Real estate investment trust (REIT): A diversified investment fund with many different types of real estate.
  • Rental properties: Residential and vacation rentals can generate consistent monthly income.
  • Commercial real estate: Commercial real estate can include office buildings, real estate spaces, and more.
  • Land: Purchasing land at a low price means you can sell for a higher price later or charge tenants rent for building on the land.

How Can I Build Passive Income Opportunities by Buying Turnkey Properties? 

One of the advantages of turnkey properties is that you can rent them out as soon as you purchase, which means that you can maximize your income potential. Additionally, since turnkeys are move-in ready, you likely will not have to pay for major repairs or maintenance for a while.

Once you build enough equity in one home or you have the cash to acquire another property, expand your portfolio. Work with a property management company for an even more hands-off approach. These companies take a fixed fee, usually a percentage of the rent, and handle tasks related to your property so you don't have to. 

Are Turnkeys Cheaper Than Flipping Homes? 

It depends. Turnkeys often cost more up-front because they are brand-new, so buyers pay for the convenience. However, flipper houses can also come with unknown, hidden costs. Investors may discover upon purchase that there is a much larger investment required than they initially thought, which can eat into their profits.

Invest in Turnkey Real Estate Today 

If you are looking for a solid investment opportunity, turnkey real estate is a fantastic choice. With so many opportunities to generate income, turnkeys can be a valuable tool in your overall real estate investment strategy.

Are you interested in learning more about finance, investment, and real estate? Take a look around our website for answers to all of your questions.

This article was prepared by an independent contributor and helps us continue to deliver quality news and information.

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