Real estate investment is something which many people recommend to those with capital which they are seeking to work and if we look at the history of the real estate market it is easy to see why. Investing in real estate offers a stable market in which to put your money, it is very much a tangible investment as the asset is a physical entity, and there are a number of ways in which investors can make more from this industry. Something which has been on the rise within the real estate market for over a decade is the attraction of Turnkey properties, and this is why they are so desirable.
What is a Turnkey Property?
A Turnkey property is one which is ready for a tenant to move in instantly, they are purchased by an initial investor who then injects cash into the maintenance, the design, the furnishing and the renovation of the property and then sold on to an investor who is looking to rent the place out. This type of property really rose to prominence during 2007/8 when the real estate market slumped, and investors were able to purchase properties at low prices.
Why Would They Sell It?
The natural thought process here is ‘why wouldn’t the initial investor simply rent the property out?’ and it is a valid question. The reason as to why this doesn’t happen and why they prefer to sell the property on to another investor is that they are operating with a different strategy. Instead of looking to make long-term gains on their investment, they prefer to make small amounts of profit and free up their cash for another reinvestment. Sitting on a property over the long term means that your capital is tied up and could restrict your investment strength for other projects. Those who buy properties and work on making them livable also know that they can easily sell these properties on to investors who want an easy route to the real estate world.
Turnkey properties are especially desirable to those who do not have the knowledge of the real estate industry which is required to make sound investment, or the time in which to dedicate to their investment. Very often someone will purchase a Turnkey property and then use a company to manage it for them, paying a small fee for the privilege. These types of properties offer a ‘real estate starter pack’ for investors and allows them to avoid an array of issues which often present themselves when purchasing investment properties. In truth the only requirement to purchase a Turnkey property is money, assuming the investor has the capital they can simply make the sale and then watch rental earnings come in each month, without the need for additional investment or the contribution of time to get the most out of their property.
As you can see these types of properties benefit all parties and it is why they have become so successful.