Turnkey Rental Properties

This is a guest post from Daniel Sperling-Horowitz, CEO of OfferMarket

What are Turnkey Rental Properties?

Turnkey rental properties are single family and multifamily houses that are sold to rental property investors in “turnkey” condition either with tenants already in place or ready to rent. Turnkey means no rehab work needs to be done, you just turn the key and you are home…

Who buys Turnkey Rental Properties?

Turnkey rental property investors are typically looking for a hands-off way to invest in the rental property asset class without needing to handle the core components of rental property investing:

  • finding a property that needs renovation
  • renovating the property
  • screening tenants and leasing the property
  • managing the property and tenants

Many turnkey rental property investors are out-of-state investors living in real estate markets that are not attractive for rental property investing.

What metrics do turnkey rental property investors analyze?

Turnkey rental property investors look at several metrics when assessing investment opportunities. Here are the most important metrics:

  • Cap Rate 👉 Net Operating Income (“NOI”) ÷ Current Market Value
  • Cash-On-Cash-Return 👉 Cash Flow ÷ Invested Capital
  • ​Gross Yield 👉 Gross Annual Rent ÷ Current Market Value

Feedback

If you’re a rental property investor buying turnkey rental properties…

  • where are you buying
  • what is your criteria?
  • what turnkey property provider(s) are you working with?

If you’re a rental property investor opposed to buying turnkey rental properties: what are your thoughts on turnkey rentals?

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