What to Expect From Your Turnkey Rental Property Ownership
If you’ve never owned a turnkey rental property before, you may not be sure about what to expect. There are lots of horror stories about being a landlord. But owning a turnkey rental property ownership isn’t like being a regular landlord at all. So what exactly can you expect from this experience?
Working With an Investment Coordinator
First off, if you purchase a rental property through American Real Estate Investments, you’ll be working with an investment coordinator who will work with you to determine your goals regarding your real estate investment. This process helps ensure that your turnkey property investment experience meets with your expectations.
Investment of $20k to $50k
Turnkey rental investments usually require only between $20k and $50k investment for the down payment on the property. This may be in stark contrast to the amount of money you might have needed for your own personal residence, but it’s more than enough to get you a quality turnkey property in a decent neighborhood.
Most turnkey property owners report very positive property appreciation after only a few years. Obviously this is dependent upon economic conditions where you invest, but real estate is the only investment out there with no chance of ever going to zero. Historically, real estate has proven to appreciate over time again and again. In a couple of rare cases, rental properties purchased through American Real Estate Investments even appraised at a higher value immediately, giving the new owners instant equity. That kind of scenario isn’t usual, but it is reasonable to assume your turnkey property will appreciate in value over time.
More Time and Freedom
The whole point of investing in turnkey property is to improve your bottom line and gain a better quality of life. The essential ingredients of that higher quality of life are more time and more freedom. That’s why at American Real Estate Investments we always ask, what is your return on life? When you purchase a turnkey property from us or another turnkey provider, you can look forward to having a higher quality of life. Turnkey properties have the potential to offer more time to spend with your loved ones and more freedom to do the things that matter most to you.
What is hands-off lanlording? It’s the landlord experience without the hassle of being directly involved with the day to day minutiae that other landlords have to deal with. For example, a traditional landlord has to field calls or emails from tenants for every tiny thing, like a bent window blind, or a loose door knob. A turnkey property landlord doesn’t deal with those phone calls and emails. When you have a property manager in place for your turnkey property, they get the emails, they get the late night phone calls. The tenant doesn’t even have your contact information. What’s more, the hassle of going out the property to fix that loose door knob doesn’t fall on your shoulders, either. The property manager is responsible for going out to the property and responding to the tenant’s calls and communications. That’s the beauty of hands-off landlording.
Fully Renovated Property
Most-but not all-turnkey properties are fully renovated when you purchase them from the turnkey rental property provider. At American Real Estate Investments, we take great pride in our quality renovations. You’d be proud to own any one of our turnkey properties. Turnkey properties are ready for a tenant to move in. They have all of the necessary building permits for the rehab work that was completed on the property. When you buy a turnkey property, it’s unlikely you’ll be in a situation where you’d have to buy a new roof or furnace a month down the line. A quality turnkey rental property provider would have taken care of anything that needs fixing or replacing before selling you the property.
The property manager of your turnkey property will provide you with reports regarding your turnkey property. These will be auto generated and available-in most cases-via an online portal. You basically just login to the property manager’s site with your username and password and you get full reporting of all the activity for your property. Every property manager’s site is a little bit different, but in general you can expect to see things like tenant communications, a record of service calls to the property, receipts, photos and of course financial reports. You can then download the information if you want, or leave it on the portal for later viewing. The expense reports can be downloaded so you can give them to your accountant for tax reporting at the end of the year. As far as reporting your income, all you have to do is send your deposit receipts to your accountant so they can match them up with the property manager’s records. Basically, with this kind of full reporting, you don’t have to be business-minded or even be good at math to be a successful turnkey property owner.
Good tenants will pay their rent on time every month. Since part of your property manager’s job is to vet tenants, it’s likely you’ll be able to rely on monthly income from your turnkey property. The property manager will offer you the option to have your rental income deposited into a bank account automatically or to receive a check in the mail. Most turnkey property owners opt for automatic deposits since it’s faster and easier. One thing to note is that rental income is less dependable than some other passive incomes, like private money lending. Tenants may pay earlier than the first, or they may take advantage of the grace period, so a rent check may drift in a little later than your mortgage payment is due on the property. For that reason, it’s advised to put money aside to cover your own mortgage payment in case of the unexpected.
Whether you decide to purchase a turnkey property from American Real Estate Investments or another company, these are many of the things you can expect from your ownership experience. If we can answer any questions for you about owning a turnkey property, or about any of the other investment opportunities we offer, please don’t hesitate to get in contact with us.