Turn Key Real Estate has the tendency to bring out some very strong opinions from Real Estate Investors. Personally, having built a great portfolio of properties I’m a huge fan.
Now, when I first got started in turn key (or passive) Real Estate Investing there was a tremendous learning curve. I made tons of mistakes, which is exactly why my first recommendation is to find a reliable third party company that can locate properties, renovate and professionally manage them for you. When I first got into turn key real estate I lost money. A lot of it. And it’s exactly why I started Thrive Real Estate Investing, which I’m proud to say is one of the nation’s leaders in selling turn key rental properties.
Building a strong portfolio of rental properties is a tremendous way to secure an amazing financial future for you and your family. Most other forms of investing such as 401k, IRA, etc. only yield about an average yearly return of 7%. Depending on the market you invest in (personally my 2 favorite markets because of the high ROI that ranges between 15 to 30% are Baltimore and Detroit) you can earn a much higher return on your money.
So what exactly is Turn Key Real Estate?
Simply put, it’s a property that has already been renovated, is occupied by a tenant and has property management in place.
As much as I love turn key real estate, I’ve found I can actually make more money (long term) on properties that need renovation still and then can have a tenant placed in them, but that’s for another blog post.
Many times people ask me about the risk. I won’t sugar coat this, of course there is risk. There is risk with any type of investing. It requires careful research, being attentive to detail and understanding the value of the property and the potential cash flow.
What are the benefits of turn key real estate?
- Ideal for Investors that are looking for passive income – Not everyone wants to buy properties that they can see or drive by on a regular basis, and frankly if that’s your goal you’re going to leave a lot of money on the table. 9 times out of 10 investing in areas outside of where you live will make you a tremendous amount more money. Often times your local market doesn’t have the price point or return that you’re looking for. I personally focus on hot, up and coming markets that have a tremendous amount of long term potential.
- Passive Income has a tremendous upside – Most investors that purchase turn key real estate aren’t doing it as a full time job. Passively building income over time to contribute to long term financial goals for you and your family is a great way to secure a strong financial future. Sure there’s legwork involved in researching the right market, but when your investments are in the hands of a highly professional company that takes care of all the time consuming aspects of turn key investing it’s a huge advantage to any investor.
- Easy learning curve – There are still certainly things to learn don’t get me wrong but because the turn key company has taken care of all the heavy lifting (finding a great property, renovation/rehab, finding a tenant, and managing the property) you can start to invest right away without fear of making costly mistakes. The other advantage is that you are leveraging the expertise of others that have been involved in turn key investing for many years.
- Growth potential – One of the benefits of turn key investing is the ability to leverage your portfolio. Many investors will use an IRA or 401k to invest. Many people aren’t aware that they can borrow up to $50,000 at a time from their 401k. And an IRA can easily be converted into a Self Directed IRA and used to purchase investment properties. Even investors that choose to use cash to purchase properties still have tremendous leverage, because after purchasing the property they can do a cash out refi and pull out around 80% of the value of the property. This leverage allows investor to keep purchasing properties by leveraging the value of what they’ve already purchased.
- Market Insight – A good turn key real estate company will give you market access and insight that you’d never be able to get on your own. A good company can help you to identify promising areas and help you to make more money.
Overall, investing in turn key real estate has the potential to secure an extremely solid future for you and your family. And as far as getting the biggest “bang for your buck” investing in an appreciating asset that is cash flowing provides tremendous advantages over most other forms of investing.
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