Some of my friends and family know that I invest in real estate, but most don’t really know how or what I invest in. If you’re like me, most of the people in my group of friends, family, neighbors, co-workers, etc. don’t really have the same level of interest in personal finance and investment as I do, so most don’t engage in those conversations. But, occasionally, some ask deeper questions and their reaction is usually the same. You’re doing what?!
Since 2016, I’ve been investing in turnkey real estate rentals in several different markets across the country. In fact, all of them are on the other half of the country from where I live. That sounds crazy, right?! Allow me to help you understand why it is not that crazy. For today, let’s just start with what is a turnkey property. We’ll get into the weeds of all the reasons I really like the model in the future.
Turnkey rental properties, for simplicity, are properties available for purchase for investors that have been purchased, rehabbed to rent ready status, and are under agreement with a property manager. They are a “turnkey” purchase for you as an investor to buy a property that is ready for a tenant; in some cases, it already has a tenant in it. After the purchase is complete, you are now the owner of a “turnkey” investment property. While it’s not completely hands-off as most of our other investments within Left Field are, your main job from here forward is to communicate with and manage the property manager.
Your responsibilities will include, but aren’t limited to:
● maintaining proper reserves to handle maintenance and repairs
● getting familiar with how to read property management statements
● maintaining the accounting records for your property, or outsourcing the bookkeeping
● approving any repairs or maintenance expenses, generally anything above a reasonable threshold of say, $400
● talking with your property manager as lease renewals come due
● working with your property manager when tenants move out and making repair and maintenance decisions to make the unit rent ready again
While that may sound a little daunting, all of the activities on a turnkey should take no more than fifteen minutes per month per property (more if you do your own bookkeeping). That time is reading your owner’s statements and a few emails and/or phone calls if there is any activity. In most months, outside of a lease renewal period, your only interaction is reading your property management statement and recording the transaction.
I’ve found the easiest way to get started is to reach out to one of several turnkey provider brokers that vet each market, property provider, and property management company with a nationwide lens. Having a partner who has vetted these three key factors in your turnkey success is the best way to get off the ground running and to cut through a lot of your initial due diligence and legwork.
One of the core tenets of Left Field Investors is passive investing. While turnkey is down the spectrum from syndications in terms of its passivity, in my experience, the returns are worth that little bit of extra work. Turnkey investing may not fit everyone’s investment goals and objectives, but there are several reasons to get into turnkey investing that we will get into in the future.
Ryan’s work life resides in the transportation insurance industry. When he’s not working or attending one of his boys’ sporting events, he’s working on passive investing of some sort that currently includes nearly twenty real estate syndications and a handful of rental properties across the country, among some other past endeavors.
Nothing on this website should be considered financial advice. Investing involves risks which you assume. It is your duty to do your own due diligence. Read all documents and agreements before signing or investing in anything. It is your duty to consult with your own legal, financial and tax advisors regarding any investment.
