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.