Top 5 Things to Look For in an Investment Property

Once you’ve decided that real estate investment is your next move, you’ll need to start looking for a good investment property. Make no mistake, as soon as you start telling people you’re looking, there’ll be no shortage of people trying to sell you a property. The trouble is, they probably have no idea what makes a good investment property. They just know it’s a property and that hopefully they’ll make some money hooking you up with the seller. Keep your wallet locked away until you know the top five things to look for in an investment property.

 

Cash Flow

 

Cash flow is the money that’s left over after you’ve paid for everything related to your investment. It’s hard to believe there’d be anything left over after paying for things like the mortgage, insurance and the property manager fees. It’s especially hard given the high cost of properties across the U.S. right now. Yet tens of thousands of real estate investors see positive cash flow every month from their investment properties. You can too, using the same strategies they use, by investing in cash flowing turnkey rental properties out of state. I would recommend looking for at least $200/month in cash flow for single family homes, and $150/mo/door for multifamily properties.

 

Affordability

 

Even cash flowing turnkey investment properties have to be affordable to you. If you aren’t able to come up with the down payment and closing costs, you won’t be able to make it work no matter how sound an investment it is. It’s possible to buy a turnkey rental investment property for less then $20,000 down and $3,000 in closing costs. If you can manage that, then you can find an affordable investment property at MartelTurnkey.

 

Upstanding Seller

 

Whether you buy a turnkey rental from MartelTurnkey or an investment property from someone else, you need to make sure you’re dealing with an upstanding and trustworthy seller. Turnkey rentals from MartelTurnkey are completely transparent. You’ll be able to know exactly what renovations were done to the property. The turnkey rentals at MartelTurnkey sell for their appraised value – never more. Make sure that wherever you buy your investment property from, you get at least this standard of transparency. If you can’t trust the seller, you can’t trust that you’re getting what you think you’re paying for.

 

Ability to Choose Your Own Property Manager

 

If you’re looking at a possible investment property that’s cash flowing, odds are that it’s out of state from where you live. You’ll need a property manager to handle the day to day. The turnkey rentals MartelTurnkey sells already come with a property manager in place. However, you’re under no obligation to retain that same property manager. You can use whoever you want, or not use a property manager at all. Be aware that this isn’t the case with all turnkey property sellers. Some of them will put you under contract to use their property manager for a certain number of years after closing, even though it’s your property! The shocking thing is the seller then likely gets a kickback from the property manager. You don’t want to work with a seller like that. You want to always be able to hire and fire any property manager of your choosing.

 

Attractive Features

 

Obviously if you’re buying an investment property you’re going to want tenants to be attracted to the property enough to rent it out. So even though you won’t be living in the property, you do want it to have attractive features that will entice good tenants. Features to look for in a good investment property include:

 

– close proximity to employment opportunities

– sidewalks

– fenced-in yard

– attractive rehab

– nearby parks/playgrounds

– local cafes, restaurants, etc.

 

A sound investment property doesn’t need to have every single one of these features, but it should at least have the job opportunities, an attractive rehab and one or two of the others on the list.

 

These are only the top five things to look for in an investment property; there are more things that you need to consider before finalizing your decision. We’d be happy to talk to you about what you should be looking for in your next real estate investment property purchase. Please contact us any time.

 

 

Looking Down the Road: Exit Strategies For Turnkey Rentals

Whenever you invest in real estate, you should have an exit strategy. An exit strategy is a way out of a deal. Sometimes an investor will get into a real estate investment with a definite exit strategy and timeline already in mind. Other times, life events require the investor to quickly liquidate assets. Before you invest in any real estate, be sure you already know what exit strategies are available to you. Turnkey rentals offer several exit strategies that you can consider.

 

Why Exit Strategies Matter

 

Exit strategies matter because no matter what kind of investment you’re in, eventually you may need or want to adjust your portfolio. They’re important because they enable an investor to get out of an investment for any reason.  Knowing what your exit strategy options are ahead of time allows you to better understand your risk and your financial position. That knowledge also enables you to maximize future profits; you’ll have a better idea of when to strike your next move or when it’s best to hold.

 

Exit strategies give you a safety net. Tying up your money is one thing, but being stuck in an investment when you have a cash crisis is something no one wants. Finally, exit strategies offer investors the chance to free up cash in order to take advantage of other investment opportunities.

 

Turnkey Rental Exit Strategies

 

There are at least four viable turnkey rental exit strategies:

 

1. Sell Your Turnkey Rental to a Family

 

If your turnkey rental is a single-family home, you could probably easily sell it to a family looking for a new home. This exit strategy might reap you the highest returns since homebuyers aren’t interested in cap rates or ROI; they’re interested in building a life. That’s why it often makes sense to purchase turnkey rentals in areas where there is a strong sense of community, where there aren’t a lot of rental properties, where there are job opportunities and where there is an abundance of attractive neighborhood amenities like parks, playgrounds, sidewalks, restaurants and cafes.

 

Keep in mind that you may need to do additional renovations and vacate your rental property before you put it on the market for sale. Properties that are sold in this way may also sit on the market for 30 days or more.

 

2. Sell Your Turnkey Rental to an Investor

 

If you purchased your turnkey rental from a quality turnkey provider, you can bet that it’s in a solid market where other investors are eager to buy. When you need to exit from your investment, you could market your property to another investor. They’ll evaluate things like cap rate and ROI and make you an offer based on their findings. For that reason, you should look at those same indicators when you buy your turnkey rental property. You can find investors who may want to buy on sites like Biggerpockets.com.

 

3. Refinance your Turnkey Rental Property

 

If you don’t necessarily want to completely lose your turnkey rental, but you need to generate some cash for something else, you can refinance it. Refinancing at the right time could yield you substantial dollars that you can use to fund another investment or take care of a pressing financial need. In fact, many turnkey rental owners do end up refinancing their investment properties in order to liquidate some equity. Be sure to shop around for your refinancing institution, as rates and terms can vary considerably.

 

4. Orchestrate a Rent to Own

 

Another option for exiting out of your turnkey rental property is to sell it as a rent to own. You could offer this to the current tenants, a family member or to the general public. Rent to own deals typically include a large deposit as well as slightly higher than normal rental rates, so you can see a little cash upfront and more cash flow during the deal. If you’re willing to wait a year or two to exit your turnkey rental investment, this might be an option worth considering.

 

You should always consider the exit strategy possibilities when you invest. As you can see, turnkey rentals offer at least four very easy to implement exit strategies, which serve to minimize your risks as well as add more value to your portfolio. For more information about investing in turnkey rentals, please contact MartelTurnkey.

 

 

Most Common Myths About Investing in Real Estate

The more people we talk with, the more we realize that there are some harmful myths about investing in real estate. They’re harmful because they hinder people from taking that important step and investing in their first real estate property. At MartelTurnkey, we want to help as many people as possible learn how simple it is to own cash flowing real estate. Here are the most common myths about investing in real estate and why they’re so, so wrong.

It Takes a Lot of Time

Everybody’s busy. We’re busy with our jobs, our families, our hobbies and all the other run of the mill tasks that eat up our day. Yet somehow a lot of people with regular jobs just like yours are able to make a lot of money on the side by investing in real estate. Why is that?

 

Because it’s a myth that real estate investing has to take up a lot of your time. You can get started in real estate investing while you keep your full-time job (in fact, we recommend it!). You can invest in real estate without sacrificing time from the other areas of your life, like time spent with your spouse or your kids or your friends. There are lots of ways to invest in real estate that don’t take a lot of time. Our recommendation is to start with turnkey rentals, which take up virtually zero percent of your time. You just buy the turnkey property and let your property manager handle the rest.

You Have to Already Be Rich to Make a Lot of Money in Real Estate

The most well-known real estate investors are millionaires many times over.  But more people are realizing wealth in real estate everyday. Were they all rich to begin with? It’s possible that some were, but that’s definitely not a criteria for being successful in real estate investing. You don’t need hundreds of thousands of dollars to buy your first property. In some cases, you may only need several hundred dollars to get started in the real estate industry. And, you can start earning money every month from a cash flowing real estate property with only $20,000 or even less. Real estate investment is within almost everybody’s reach, including yours.

It’s Best to Buy Your Own House First, Then Invest in Real Estate

Are you saving up for a down payment on your first home? It’s an exciting proposition, the thought of finally owning your own home. Unfortunately, the reality is often different than what you anticipated. First homes tend to eat up a lot of your money and time. First there’s the decorating, then there are the repairs. You want to personalize your home, so you’re willing to spend a little more so you can have the nice things in life, right? And the previous owners didn’t take great care of the flooring, so the hardwood floors need to be refinished. New first homes are like a painting; they’re never really finished. By the time you know what’s happened, your credit cards are maxed out, the Home Depot staff knows you by name and there’s nothing left over to invest for your future. That can leave you in a dangerous financial hole that it’s hard to dig out of.

This is one myth about investing in real estate that can really sabotage your future. A better idea is to invest in a turnkey rental first, then save up for your down payment on your first home. Why? Because a turnkey rental:

 

– pays you cash each month that you can use toward your home purchase

 

– provides tax deductions so you can pay less tax on earnings and put that savings toward your home purchase

 

– offers you financial security that can last a lifetime

 

Remember, buy your investment property first, then decide if you want to buy a home for yourself or continue renting. This strategy will pay off in more ways than one. A personal home is not an asset. An asset is something that makes you money, like a turnkey rental. A personal home costs you money. It’s not an asset.

Being a Landlord is a Nightmare

You’ve probably heard a lot of horror stories about being a landlord. Some of them may be true. However, many of the landlord horror stories you hear could have been prevented with a few protective measures. The first thing is to make sure you invest in a landlord-friendly state versus a tenant-friendly state. The second thing is to carefully vet your tenants. This isn’t foolproof, but it heavily weights things in your favor as a landlord.

 

But the number one thing you can do to ensure your landlord experience is more like a nice dream is to have a property manager in place. A property manager acts as a buffer between the tenant and you, the landlord. The property manager takes care of a lot of other responsibilities, too. And just so you know, all of the turnkey rental properties at MartelTurnkey are in landlord-friendly states, have a trusted property manager already in place and have paying tenants who have been carefully screened.

By the Time You Pay For Everything There’s Nothing Left Over

This is a common reason that people state for not investing in real estate. They mistakenly believe that real estate costs money out of pocket every month. This is a myth that stems from not fully understanding what the term “cash-flowing” really means.

 

When investors talk about cash flow, they’re referring to the money that’s left over after everything has been paid for. That’s after the utilities are paid, the grass is cut and the property manager’s been paid. Cash flow is net profit. If you take a look at some of the turnkey rentals for sale on our site, you’ll see exactly what comes out of the rent payment each month, who’s paying for the utilities, how much the property manager gets and what your cash return would be each month. All of our turnkey rentals are cash flowing real estate that can make you money every month. Remember, cash flow is money in your pocket.

 

Isn’t it time you dispel these myths from the way you think about real estate investing? Don’t let hearsay and myths stop you from dramatically improving your financial future and the future of your family. If you’re ready to invest in a turnkey rental, please take a look at our available inventory and get in contact with us. If you still have some questions, we’d still like to hear from you. Drop us a line or leave a comment below.

 

 

 

 

Creative Ideas to Get Money For Your First Turnkey Property Down Payment

Once you purchase your first turnkey property, you’re in the real estate game. You’ll begin receiving positive cash flow each month, deposited straight into your bank account. From there, it’s easier to envision your future as a successful real estate investor. It’s also easier after that to leverage your first turnkey property to buy more properties. But for many people, getting together a down payment of $20,000 or so feels like an insurmountable hurdle. If this sounds like you, you’re not alone. But it is possible to get the money you need to start investing in real estate. Here are some creative ideas to get the down payment for your first turnkey property:

 

Cash in a Whole Life Insurance Policy

 

Unlike term life insurance policies, whole life policies can be cashed in for their accumulated value. If you have a policy you’ve been sitting on for several years, you just might have enough accumulated value to get the money for a down payment on a turnkey property. Even better, cash out your whole life policy and replace it with a term life policy so your heirs are still protected.

 

Borrow Against Your 401(k)

 

If you have a substantial retirement account built up, you might be able to borrow enough to make a down payment on a turnkey property. The IRS allows you to borrow up to 50% of your balance. If you’re borrowing from a 401(k) you have five years to repay the loan. Speak to your employer retirement benefits representative and your CPA for details about your specific options.

 

Get Friends and Family to Pitch In

 

If you’re close with your friends and family, consider asking them to go in with you on the down payment. You can split the monthly cash returns or buy them out with an investment plus interest payment down the road. If you go this route, make the deal official so you protect your personal relationships with your group.

 

Get the Money From Mom and Dad

 

Parents can gift up to $15,000 cash to their children with no tax repercussions. If your parents don’t know this or haven’t done it, ask them if they would be willing to do that. It could be an advance on your inheritance if necessary. From there, you could implement some of the other ideas mentioned here to come up with the remaining $5,000 or so.

 

Take a Second Job

 

This option takes longer and is harder than the others, but it is a legitimate way to come up with down payment money for your first turnkey property. You don’t need to work too many hours to accumulate $20,000 over the course of a year. Once it’s accomplished, you’d have the pleasure of knowing you don’t owe anyone for it so you never have to pay it back.

 

Cash in Other Assets

 

If you have Bitcoin, Etherium or another virtual currency in a high balance account, consider cashing that in to get money for your turnkey property. You might also have other assets you can cash in, such as an assortment of collectibles you could auction on eBay, a website you can flip online, a second car or motorcycle you no longer need or something else. Those assets won’t be able to help you build financial independence like real estate can.

 

Please keep in mind that if you are going to be using conventional financing for your turnkey properties then you will need to season these funds in your bank account for 60 days. This means that if your parents gift you $15,000, you must leave those funds in your bank account for 60 days or more. Once those funds have been seasoned then you can begin the loan process.

 

You should try to do whatever you can do to gather up enough money for a down payment on your first turnkey property. The long-term tax advantages and monthly income will make it very worthwhile. For information about any of our turnkey rentals for sale, please contact us today.

7 Turnkey Property Benefits to Know

Turnkey properties offers many advantages that you may not be aware of. Real estate investors who are seeking cash flow are often focused on how much income can be generated each month from a turnkey property. While this is certainly one benefit of owning a turnkey property, there are several more ways that you benefit financially from your real estate rental property investment. In this article, we look at all the benefits that investors gain when owning a turnkey rental property.

 

1. Equity Buildup

 

Equity buildup occurs when the value of the turnkey property increases in relationship to the decrease of the loan amount. When you first purchase a turnkey rental, it’s rare—but not unheard of—to acquire instant equity upon purchase. However, it is very common for real estate investors to build equity in a short period of time. This is particularly true when investing in up and coming cities like Memphis and Birmingham. Once sufficient equity is built up, you can leverage it to finance future real estate investments.

 

2. Turnkey Property Appreciation

 

Along similar lines, turnkey property appreciation is another benefit you may not have fully realized. Real estate rental property is an asset that offers security for the future. As that property appreciates in value, your financial net worth increases. This can be leveraged to qualify for certain exclusive loan types, to help you become an accredited investor or even to sell for profit. Should your financial situation change, you could sell your turnkey property that’s appreciated in value and resolve your own financial problem, or help out a family member who’s in trouble. Even better, you could take advantage of the 1031 exchange and turn your appreciated turnkey property investment into an entire real estate portfolio of properties.

 

3. Turnkey Property Principal Payoff

 

If someone told you that it was possible to get into real estate for $20,000 or less, you’d probably be very skeptical, right? But that’s exactly what you can do when you buy turnkey property. If you look carefully at the financial information for an example turnkey property from MartelTurnkey, you’ll notice two things: 1) the tenant pays for the utilities and 2) the net cash flow is $268 per month. What some less experienced real estate investors don’t realize is that the $268 net cash flow is after the expenses have been paid; specifically, after the mortgage loan payment is made. That cash flow number is also after the property management fee has been paid. So for a $19,000 initial investment, you get a turnkey property with a tenant paying down the principal for you. After the mortgage loan is paid off, the continuing rents pay back your initial investment of $19,000.

 

4. Tax Deductions on Turnkey Property

 

Yet another turnkey property benefit you may not fully realize is the numerous tax deductions. Even though you have positive cash flow from your turnkey rental, the expenses related to turnkey property ownership are tax deductible. This includes things like:

 

– property management fees

– marketing fees

– purchases and repairs for the property

– commissions

– depreciation on appliances, etc.

 

These tax deductions are a powerful way to offset income earned from your full-time job or other income-producing projects. To ensure that you’re taking advantage of the maximum number of tax deductions possible from your turnkey property, consult with a tax professional.

 

5. Cash Flow

 

Of course, the number one reason why many real estate investors like turnkey rentals is for the cash flow. This cash flow is virtually passive income that you don’t have to “work for.” Your only responsibilities will be to respond to property manager communications every now and then, and to pay for any needed repairs or replacements for the turnkey property. Cash flow is pure profit, and is a definite benefit to owning rental property. However, as you’ve learned, it’s not even the most important or valuable benefit.

 

6. Estate Planning With a Turnkey Property

 

There is perhaps no better legacy to leave to your beneficiaries than turnkey property ownership. When you leave real estate to your heirs, you leave behind the tools and assets that they can use to grow their own wealth and long-term financial security. After you’re gone, your heirs can reap the benefits of passive income, which may even alleviate some of the financial strain immediately after your passing. Your heirs can then choose to keep the property for income, live in it themselves or sell it for profit. Passing on a turnkey property is an estate planning benefit that requires nothing more than a well-executed will or trust.

 

7. Hedge Against Inflation

 

Turnkey rental property ownership is also an effective hedge against inflation. When you invest today, you lock in the lowest mortgage interest rates that we’ve seen in decades. As time goes on and rates increase, others will be forced to pay higher interest while you enjoy paying off your mortgage loan faster and gaining value faster in your investment. The key to this particular strategy is to act quickly, before rates increase. If you have $20,000 or so ready to invest, there’s hardly a better place for your money than a turnkey rental property.

 

At MartelTurnkey, our goal isn’t just to sell turnkey rental properties. We want to establish long-term relationships with our real estate investors by offering valuable turnkey rental opportunities and real estate investment information that will help you build wealth as an investor. If you have any questions about all the benefits you can reap through turnkey rental properties, or you’re ready to buy one of our available turnkey rentals, please don’t hesitate to contact MartelTurnkey today.

 

 

 

How to Choose a Turnkey Rental Property

Turnkey rental companies offer properties you can buy to generate passive income for you and your family. But how do you choose turnkey rental property to begin with? It’s important to learn more so that you can make an informed decision that will serve your financial needs now and in the future. Once you learn how to choose a turnkey property you’ll be able to repeat the same decision-making process so that your future real estate turnkey investments will become easier to carry out.

 

Choose The Best Turnkey Rental Company

 

The first step in choosing a turnkey rental is to choose the best turnkey rental company. In fact, this is the most important part of the whole process. If you buy from a less respectable company, you may end up with a property that could give you problems down the road. If you think about everything the turnkey company is involved in, you’ll see how they heavily influence the soundness of your investment.

 

The turnkey rental company’s job is to offer viable rental properties in good markets. At MartelTurnkey, we do extensive research into markets around the country. We look at the job market, economic indicators, local development indicators and much more. We not only want to purchase properties that will make us money. Our goal is to enable our investors to own turnkey rentals in areas that will provide lasting value and appreciation over the years.

 

Whether you choose MartelTurnkey or another company, take your time with this step, and be sure to learn more about how to choose a turnkey rental company.

 

Decide How Much You Want For Monthly Cash Flow

 

With turnkey rental properties, cash flow is king. Certain properties will cash flow more than others. A quality turnkey rental company will give you all the information about how much cash flow you can expect from a particular property – before you buy. This information will enable you to calculate your estimated ROI, or return on investment.

 

Remember that your monthly cash flow includes property management fees, but does not include costs for replacements and certain repairs to the turnkey rental property. Also keep in mind that while $200 in monthly cash flow isn’t that much, you can compound that income by buying more turnkey rentals along the way. Eventually, you can easily own enough turnkey rentals to replace your salary or your spouse’s salary.

 

Figure Out Your Payment Options

 

Just like other real estate, you have options when it comes to paying for your turnkey rental property. You can pay cash of course, if you have enough saved up; or you can make a down payment and finance the rest. Some turnkey rental property companies, such as MartelTurnkey, offer in-house financing. MartelTurnkey can also put you in contact with trusted finance companies that we’ve worked with in the past, and that understand turnkey rental investing.

 

The challenge with financing turnkey rentals is that they aren’t owner-occupied, so this kind of real estate purchase won’t qualify for an FHA loan. Many turnkey rental investors opt for Fannie Mae backed loans. You can get up to ten Fannie Mae loans, which is enough to build a substantial investment portfolio. Speak to your banker about financing options or feel free to contact us at MartelTurnkey for assistance obtaining financing.

 

Don’t Worry About The Location

 

It can feel strange investing in a property that you may never lay your eyes on; especially when many people advise you to invest in areas you’re familiar with. Turnkey rentals investments are different; especially when buying from a turnkey company.

 

In order to get a cash flowing turnkey rental, you’ll likely need to invest in a market outside your home state. In the U.S., the real estate market varies from state to state and from city to city. Certain cities, like Memphis, are ideal for turnkey rental investing. Other cities, like Los Angeles, are nearly impossible to find cash flowing real estate. Turnkey rental companies sell investment properties that are located in good investment markets.

 

When investing in turnkey rental properties, don’t worry if the property isn’t located near your primary residence. Don’t worry if it’s in a place where you’d never want to live or even visit. When you have a property manager taking care of the rental for you, you don’t need to live near your turnkey rental because you won’t be handling the day to day operations.

 

The idea is that the residents of that city will want to rent that place and are willing to pay a rent high enough to give you positive cash flow each month. As long as you’re working with the best turnkey rental company and you have a property management company in place, don’t make location a top concern.

 

MartelTurnkey has several affordable investment rental properties available for you to choose from. Our list is always changing as properties are bought and we acquire new ones. Just let us know when you’re ready to choose a turnkey rental property and we’ll begin the process for you.

 

Full Steam Ahead For $50 Million Memphis Mixed-Use Development

It was just over a year ago that developers put forward a proposal for a $50 million mixed-use development in the Memphis Broad Avenue Arts District. The site is perfectly situated near the district’s hundred-year-old storefronts and Water Tower Pavilion. In an area that was largely allowed to age after the golden years of Martin Luther King’s inspirational era, the partnership of developer James Maclin and Loeb Properties owner Bob Loeb stands to change the future landscape of Memphis.

 

The road has been long and hard to reinvigorate a commercial district that had previously fallen victim to vacancies and dilapidation. Interestingly, it wasn’t the promise of funding from outside sources that swayed the course of this area. It was instead the sheer force of desire from a grassroots crusade made up of nearby property owners, tenants and “New Urbanism” proponents. These determined citizens organized themselves to build and improve infrastructure in the area, such as protected bicycle lanes, sidewalk cafes, slowed traffic and street landscaping; a movement they called, “A New Face For an Old Broad.”

 

Indirectly, it was the passion and interest of the Memphis locals that attracted the attention of developer James Maclin and countless other business owners to invest tens of millions of dollars into the Binghamton area. The Memphis government is on board with the development plans and the project is going full steam ahead. The over 8.8-acre development site plans include a mixed-use building with approximately 400 apartments and 12,000 square feet of street level shops. Out of respect for the Memphis community, the iconic water tower anchors the project as “Water Tower Courtyard.”

 

Invest in Memphis Turnkey Rentals

 

This is the perfect time to invest in Memphis turnkey rentals. The city of Memphis is once again distinguishing itself as a thriving and growing metropolis that hasn’t yet reached its potential. As an investor, you want to get in on owning turnkey rental property now, while it’s still affordable. The special feature of Memphis as an investment opportunity is that its growth is not being forced upon it from outside forces.  Memphis’ strength comes from its own residents and local business owners. Memphis is growing organically, not as a planned or forced development from some company that will move on once it’s made its fortune; the growth that we’re seeing in Memphis is founded on a sincere desire from its own residents to infuse this historic city with life and bounty.

 

The $50 million mixed-use development is just one small example of the planned improvements that Memphis has experienced in the last decade or so. More improvements are in the works; every day the city is revitalizing every square inch of its footprint. A visit to this area of the city includes scenes of cranes and ongoing construction work. The resulting facelift will do much more than improve the looks of a forgotten block in Memphis; it deepens the roots of this vibrant community and ultimately strengthens the foundation of your Memphis turnkey rental investment.

 

 

Buy a Turnkey Rental Instead of a First Home: Here’s Why

 

Are you saving up money for a down payment on your first home? If you already have $17,000 or $20,000 saved up and sitting in an account, what’s the best way to make that money work for you? Buying a home actually isn’t the smartest decision, especially at this stage in life. Whether you’re still saving or you have enough money to put a down payment on something, you should buy a turnkey rental instead of a first home. Here’s why.

 

You’ll Be Saddled With Your Home

 

Homes come with a never-ending list of things that need to be done and things that need to be paid for. Make no mistake – a home takes money and work to maintain. Whenever anything goes wrong, it’s on your shoulders to fix it, whereas if you’re renting a place for yourself, you just call up the leasing agent and they send someone out.

 

A Turnkey Rental Gives You Freedom

 

On the other hand, a turnkey rental gives you more time and fewer responsibilities to do what you want. When you buy a turnkey rental with a tenant and a property manager in place, your only job is it deposit checks into your bank account. Actually, strike that. That’s the property manager’s job. All you have to do is receive the money. Turnkey rentals essentially take care of themselves, with the help of the property manager of course. And, with the added cash flow from just one turnkey rental, you can maybe even take an extra day off work once a week, or save up to buy another turnkey rental for even more freedom.

 

Home Ownership Isn’t the American Dream

 

You may have been sold on the idea that home ownership is the American Dream, but that’s a fallacy that the banks tell you in order to sell you a mortgage product. The American Dream is more like life, liberty and the pursuit of happiness. It’s not a huge house that ties you down to one spot for the rest of your life, forcing you to work 80 hours a week just to pay the mortgage and put food on the table. Home ownership can shorten your life through stress, take away your liberty to create future wealth and make you miserable and worried that you will lose it all in foreclosure. That sounds more like a nightmare than a dream.

 

Turnkey Rentals Offer a Chance at Financial Freedom

 

Financial freedom is something that everyone can strive for. Buying a turnkey rental is a step on the path toward financial freedom. Cash flowing turnkey rentals put money in your pocket every month. Yes, there will be months when you need to pay for something that needs replacing or fixing, but the bottom line will be positive cash flow. That’s extra income that will help you to ultimately achieve financial freedom. One turnkey rental may ‘only’ yield $200 in positive cash flow a month. But when you build upon that, you could have four or five turnkey rentals in your portfolio. Then you’d have $800 or $1000 in extra income every month. That’s income that doesn’t require your time, once you make your original purchase. That’s true financial freedom.

 

Home Ownership Isn’t That Great For the Economy

 

When people buy a home, they tend to live there for a long time. It’s only when they sell and buy a new home that the economy is stimulated. In fact, the economy in general only thrives when things are bought and sold; not when people hold, like they do with primary residence homes.

 

Turnkey Rentals Make Economic Sense

 

From a purely economical standpoint, turnkey rentals make better sense.

If everyone rents their house, and everyone owns turnkey rentals, then everyone gets a share of the housing market. The renters are also the landlords for rental properties. Renters tend to move more than homeowners, since they can move to where the jobs are, or where their new school is located.

 

There’s obviously a lot to be said for homeownership. Buying your own home lets you put down roots, become part of a community and customize your home and surrounding property the way you want to live. After a time, you’ll eventually likely want to buy your own home. But if you’re in the early stages in your life, and you have only your job and a little bit of savings, buying a turnkey rental is a better choice than buying a first home.

 

With a turnkey rental, you have the chance to build a better future for yourself that includes financial freedom. If you buy a house, it could be decades or never before you ever have the money again to invest in turnkey rentals.

 

 

Why Use Turnkey Rentals For Your 1031 Exchanges?

Turnkey rentals are ideal for the real estate investor who does 1031 exchanges. If you’re a new or seasoned investor and you want to take advantage of Section 1031 of the Internal Revenue Code to defer capital gains tax, there’s no easier way than to team up with a turnkey rental company for all of your investment properties.

 

What Are The Basic Rules of the 1031 Exchange?

 

In order to qualify for the 1031 exchange, the investor must comply with a basic set of rules and guidelines. Some of them are straightforward while others are more ambiguous. Here they are in a nutshell:

 

Property Must Be Like-Kind

 

As the IRS states, “Like-kind property is property of the same nature, character or class. Quality or grade does not matter. Most real estate will be like-kind to other real estate.” The IRS like-kind tips site goes on to say, “Real properties generally are of like-kind, regardless of whether they’re improved or unimproved.” For example, almost any type of investment property could be like-kind to a turnkey rental property.

 

Property Cannot Be Investor’s Residence

 

This includes the primary residence and vacation homes and second homes. You can rent out the investment property to a family member or friend at fair market value if you want, but you can’t live in it yourself for any length of time.

 

Property Must Be For Investment Purposes

 

This means no fix and flips. Most tax experts recommend holding the property for a minimum of a year to demonstrate investment intent. Nothing in Section 1033 specifies a year minimum, but it’s a rule of thumb most CPAs and smart investors are tending to follow. If you use turnkey rentals for your 1031 exchanges, your investment intent isn’t likely to be questioned at all, since the property will be cash flowing from day one.

 

Use of an Intermediary

 

This is one of the ambiguous guidelines. You don’t absolutely have to use an intermediary. However, you aren’t allowed to use or profit from the money between the sale and purchase. The best way to ensure you keep your hands clean, so to speak, is to use a qualified intermediary who can control and safeguard the funds.

 

Titles Must All Be in the Same Name

 

If you purchase a property under your own name, all the 1031 exchanges you do in the future pertaining to that property must be in the exact same name. So if you want to form an LLC for investment purposes, you should do it before you buy your first investment property. Note that you can take advantage of the 1031 exchange as an individual or a business entity-the IRS allows all tax paying entities the same 1031 exchange benefit.

 

Identify Property to Buy Within 45 Days

 

Here’s one of the strict rules of the 1031 exchange. When you sell a property you have just 45 days to identify a new property that you’re going to purchase. As a real estate investor, you know how hard it can be to find a cash flowing investment property. It’s challenging enough to do it when there’s no pressure, but not you’ve got the IRS breathing down your neck to hurry up and formally identify the next property.

 

This is one reason why it’s advantageous to use turnkey rentals for your 1031 exchanges. When you choose to work with a turnkey rental company such as MartelTurnkey, you have online access to an inventory of eligible turnkey rentals that are already cash flowing. It’s like having a catalog of turnkey rental properties at your fingertips. You could literally choose one in a day. 45 days would be more than enough time to identify a turnkey rental property.

 

Yet another aspect of 1031 exchange rules is that you aren’t limited to identifying one property. You’re allowed to identify up to three turnkey rental properties. You don’t have to buy two or three, but if you are ready to move up to the next investment level, MartelTurnkey periodically has two house deals and three house deals. This makes it incredibly convenient to advance your real estate portfolio in one fell swoop.

 

Close on New Property Within 180 Days

 

The last major rule you have to follow in order to claim your 1031 exchange capital gains tax exemption is that you must receive the new property within 180 days after closing on the exchanged property. Your CPA can help you work out the exact dates and deadlines; just be aware that those are actual days, not business days.

 

When you work with a turnkey rental company like MartelTurnkey, you won’t have any trouble complying with the 180-day rule. We already own all of our turnkey rentals for sale so you’re not dealing with an unknown seller that may delay or complicate the sale. Each of our turkey rentals for sale have property management in place and paying tenants. All you have to do is take over and enjoy the cash flow.

Turnkey rentals make good sense when you’re taking advantage of the 1031 exchange rules. If you’d like help choosing a turnkey rental property or you have questions, please feel free to contact us.

 

8 Tips For New Turnkey Rental Owners

Have you recently bought your first turnkey rental? Turnkey rentals are one of the best real estate investment decisions you could ever make. As a new turnkey rental owner, you may have a lot of questions about what’s next. While there isn’t exactly a manual for new turnkey rental owners, we can let you in on what to expect in the years to come, and how to make the most out of your new passive income source.

 

1. You’ll Start Getting Income Right Away

 

If you’ve purchased a turnkey rental from us with a tenant in place—as all of them have—you can expect to receive your first rent check as soon as the next first of the month rolls around. Make sure that before closing you get all the documents that the property management company has requested from you. This will include setting up your bank account for the funds to be sent to the correct account. Be mindful that you can have the funds sent to any account of your choosing. Some investors make separate banks accounts for their investments and others do not; the choice is yours.

 

2. Set Up Contact Information For Your Property Management Company

 

If you haven’t already done so, gather all the contact info for your property management company, and in particular your representative. You’ll also want to organize your online portal username and password so you can log in and view or download reports pertaining to your property. Your property management company rep can help you register for the first time.

 

3. Don’t Expect to be Busy

 

Turnkey rental ownership is a very passive income source. There really is very little for you to do, so don’t expect to be kept busy with it. Beyond organizing your home files and letting your CPA know you’ve purchased a turnkey rental, there’s not much else you’ll need to do except collect those rent checks!

 

4. Meet With Your CPA

 

Speaking of your CPA, you’ll want to either meet in person or talk on the phone to learn more about all the new tax deductions you’ll be entitled to as a turnkey rental owner. This is so that you’re sure to retain the records relating to the ownership. Your property management company will automatically provide you with receipts and records. You’ll just need to access them via your online portal and hand them over to your CPA when tax time comes.

 

5. Put Some Money in Savings

 

It’s prudent to save a percentage of the rental income for future expenses. As with regular home ownership, there will be things that need to be repaired or replaced at some point in the future. These expenses will be tax deductible but you do still have to pay for them. To ensure you can readily do that, save some of the rental income.

 

6. Save Money For Your Next Rental

 

Another reason to save rental income rather than spend it on luxuries is to buy another turnkey rental in the future. Just think of how your passive income can grow when you build up a portfolio of turnkey rentals over time. You could conceivably live quite comfortably solely on your turnkey rentals once you have a large enough portfolio.

 

7. Leverage Your First Turnkey Rental to Buy Another

 

Once you have sufficient equity built up, you can leverage your first turnkey rental to buy another. One such method is refinancing. For more information on how to refinance your turnkey rental and make another turnkey rental purchase, just contact us. We can put you in touch with willing lenders who are familiar with turnkey rental investment strategies.

 

8. Don’t Overthink the Tenants

 

When you have a property management company in place, you really don’t have to worry about the tenants. The property management company takes care of vetting tenants, renewing leases and filling vacancies. Even if an eviction becomes necessary, the property management company will handle that on your behalf. And remember, your MartelTurnkey rental property already has a trusted property management company in place.

Now that you’re a new turnkey rental owner, you can look forward to years of passive income. Thank you for choosing MartelTurnkey. If you have any other questions about your property or what to expect, please feel free to contact us.