In real estate investing, most people choose the classic buy-fix-flip or buy-fix-rent models. But more and more investors are discovering just how costly and time consuming and effort-intensive these models are. Who has the time and money and energy to put into these investments?
Fortunately there’s another way that you can invest to get great properties WITHOUT the hassle and headaches of the classic method of investing.
Turnkey real estate investing
It’s called turnkey real estate investing and it works like this: Someone else does all the legwork to acquire the property, renovate it, put a tenant in it, and put a property management company in place. End result? You bypass all the headaches and hassles and get an investment property that cash flows right from day one.
Why buy turnkey rental properties in New York New York?
Investors love turnkey real estate because it’s hassle-free, headache free, and the returns start pouring in right away.
Want more reasons to the question why buy turnkey rental properties in New York New York? Here’s our favorite reasons…
No Need to Fix It Up
The greatest benefit of buying a turnkey rental property is that someone else has already done the work to repair the property. You don’t need to find a property that needs to be fixed up. You’ll never deal with a contractor for major repairs because the property has already been repaired. If the seller already has a property management firm in place, you won’t have to handle calls for broken air conditioners and stopped up toilets – the property management firm already does that, usually for about 10% of the monthly rent. When you buy turnkey rental properties in New York New York that were recently fixed up and filled, you won’t have to deal with housing repairs or maintenance!
Faster Cash Flow Generation
Who doesn’t love immediate cash flow? Someone has already repaired the property, and these costs are reimbursed when you buy the property. The house flipper or prior owner has paid the taxes and utilities and maintenance costs up to the point of purchase. When you buy a turnkey property with a tenant, you automatically receive the rental income from the tenant minus any property management fees. You will owe the property taxes and home owners insurance from that point but these are normal costs for a landlord. A landlord must pay these costs anyway. However, with the purchase of a turnkey property, you immediately generate cash flow from the tenants the moment you assume these costs. The result is faster cash flow.
Higher Occupancy Rates and Overall Income
One of the benefits of turnkey property is the fact that it isn’t empty and unlikely to be such in the near future.The prior owner or the property manager will have performed due diligence in screening tenants, such as verifying their creditworthiness and prior payment history.
A fixer-upper is vacant until it is repaired and then rented out. It can take months to finally get someone in the property, paying rent. Buying an empty home ready for occupancy entails delays as well, though not as much as a fixer-upper. You have to close on the property, take ownership, market the property, screen tenants and, finally, collect rent…
Turnkey rental properties on the other hand, come filled with income generating tenants! By definition, there is no delay in filling the property. The tenant is bound to a lease that guarantees you ongoing income through the remainder of the lease. As long as the rent rate is properly set to match the market and size of the property, the current tenant will probably stay when the lease is renewed. By buying a property that has an established tenant, you not only avoid having to find a tenant today but likely won’t have to hunt for one in the future. This reduces the odds of a vacancy in the rental, improving overall profits.
Simplified Financial Analysis of the Deal
One hidden benefit of turnkey rental property deals is the simplified financial analysis for a buyer. What is the current mortgage payment, if any? How much are the property taxes, property insurance and property management fees, if any? Compare these costs to the current rent rate. If you don’t like the profit margin, you don’t buy the property. Then why buy turnkey rental properties in New York New York?
There is far less risk of making a costly mistake, since you aren’t worried about not getting the mortgage rate you expect, paying more in repair bills than your budget allows, not being able to collect the rental rate you need to cover the bills and so forth… When a turnkey property becomes available, you can review their expenses against the rates you’d likely pay for things like property management, maintenance and insurance. If you can get a lower rate for any or all of these bills, your profit margin may be greater than the current owner! However, this is a much shorter list of ways to boost the bottom line than debating whether or not to replace the roof, upgrade the home security system, add another bathroom, install Formica in the bathroom or a hundred other ways to repair a property or upgrade it to attract tenants.
The simpler financial analysis with fewer factors to consider means you are far less likely to make a bad decision, improving your odds of profiting in real estate by buying turnkey rental properties. That is the best answer for why buy turnkey rental properties in New York New York.
Got more questions? Feel free to give us a call at (516) 4909063 or fill out our form to see what turnkey rental properties in New York New York you can buy today!