My, How You’ve Grown! Your Property Values, That Is!

July 6th, 2021

At MartelTurnkey, we are consistently praising the positive cash flow benefits of turnkey rentals. If you’re looking for a way to increase income, have your mortgage paid for by your tenants and enjoy the many tax breaks of being a landlord, then turnkey rentals are the way to go. But cash flow isn’t the only big benefit from turnkey rentals. We took a look back at a handful of properties that we’ve sold to our real estate investors in the past. We ran comps on the houses below so you can see for yourself how these property values have grown over the years!

 

3718 Skylark Drive, Memphis, TN

876 Sq. Ft., 3 bedroom/1 bathroom

Sold for $75,000

Current Estimate: $100,000

Increase of $25,000

33% Increase In Value in First 24 Months 

 

5216 Clement Ave., Cleveland, OH

1,274 Sq. Ft., 3 bedroom/1 bathroom

Sold for $80,000

Current Estimate: $115,000

Increase of $35,000

43% Increase In Value in First 24 Months

 

5429 Elmwood, Cleveland, OH

1,035 Sq. Ft., 3 bedroom/1 bathroom

Sold for $75,000

Current Estimate: $110,000

Increase of $35,000

46% Increase in Value in First 24 Months

 

15901 Edgewood Ave., Cleveland, OH

1,479 Sq. Ft., 4 bedroom/1 bathroom

Sold for $88,000

Current Estimate: $120,000

Increase of $32,000

36% Increase in Value in First 12 Months

 

18721 Fairway Ave., Maple Heights, OH

910 Sq. Ft., 3 bedroom/1 bathroom

Sold for $78,500

Current Estimate: $115,000

Increase of $36,500

47% Increase in Value in First 24 Months

 

As you can see, some properties have increased more in value than others. By and large, whether or not a property rises in value depends upon several factors, none of which are entirely predictable. With real estate, location is everything. If an area is experiencing economic and infrastructure growth, population increase and renewal, property values will rise accordingly. At MartelTurnkey, we conduct scrupulous analysis to determine a market’s outlook for growth before we invest in the area. We don’t have a crystal ball, but so far we’ve been very accurate. 

 

Does Refinancing a Turnkey Rental Make Sense?

 

Recently, there has been a lot of talk about the benefits of refinancing. Mortgage rates remain low and if you bought when rates were high, you might be thinking about refinancing your turnkey rental. But refinancing turnkey rentals doesn’t always make sense, no matter how low borrowing rates currently are. 

 

Unless you hold them for long enough so that they increase in value, it may not be profitable or practical to refinance. Some of our real estate investors bought turnkey rentals from MartelTurnkey back in 2018. Now they’re refinancing those properties and pulling out almost all of their cash. Others have decided to go a different route and have upgraded and renovated their houses even more and are now flipping them, since sales prices are so high right now. 

 

But to buy a turnkey rental and then try to flip it or refinance it within the first year is very hard, because typically when you buy turnkey rentals you’re buying them for market value. So you would need to wait several years to see the kinds of increases that would make refinancing or flipping make sense. 

 

Turnkey Rentals For Cash Flow and Equity

 

Turnkey rentals are usually sought after for passive, positive cash flow. You can use the monthly income to pay toward the mortgage, or save it to buy another turnkey rental. This is the

“ladder” to build lasting, generational wealth. Over time, if you continue to use that cash flow to buy more properties, you’ll have a substantial portfolio that could replace your “working” income, should you so desire. Yes, you can retire on turnkey rentals; the easiest way would be to use a buy and hold method. 

 

If you bought a turnkey rental from us years ago and it’s worth more now, another smart way to leverage your investment is to obtain a HELOC. A HELOC is a home equity line of credit; it’s not a refinance. You would essentially borrow against the equity you’ve built up. Since cash is so cheap right now, a HELOC could make sense, depending on how much equity you have in your turnkey rental. Then you could use that borrowed money as a down payment on your next turnkey rental purchase. 

 

If you discover that your turnkey rental property is worth substantially more than it was when you bought it, contact us for ideas to leverage that higher property value. We’d be happy to discuss your options in the turnkey real estate investment market.

 

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