6 golden rules to follow before investing in turnkey real estate

Real estate investing is not for everyone. It requires patience, consistency and persistence and comes with its share of challenges that need to be considered before taking the leap.

Many new investors are interested in investing in turnkey real estate because they think they won’t have to do any work. Yes, it is largely true, but this does not mean that you start investing without doing any research.

With my experience and understanding, I came up with these 6 golden rules that I could follow before investing in turnkey real estate:

1. Develop a specific Written Strategy – The rule here is that if it is not written, it does not exist. Very few people stick to the plan that are not in writing. Writing a plan on paper not only ensures compliance, but can also serve as motivation when the going gets tough. Some important questions your plan should address are:

• How much cash flow are you striving for?
• How many turnkey investment properties will you have to purchase to achieve this goal?
• How long will it take to buy them at your current savings rate?

2.Research – Before investing in turnkey real estate, it is important that you explore different turnkey providers. But before that, you need to find out where you want to invest. Many investors want to invest in out-of-state properties due to different factors, including low price or high rental demands.

Therefore, while doing your research, you need to find turnkey providers in that particular state where you want to invest. You must schedule a meeting with the turnkey provider and verify the property in person.

3. Stay active – Investment properties require a large initial capital investment ($10,000 minimum), to cover the down payment and closing costs. Even after the initial purchase, repairs, vacancies, and lawsuits can result in large, immediate bills. Turnkey providers can help minimize those risks. Some of them, like us, also provide a one-year rental guarantee, but as an investor, you need to stay active. Schedule bi-weekly or monthly calls with your turnkey provider to stay informed.

4. Proper planning – Real estate investment is a non-liquid asset. Therefore, if you plan to sell it, it may take longer, that is, between a month and a year. It is a long-term investment and cannot be easily thrown away.

5. Rent – The type of earnings you will earn depends on the location of your property. You should ask yourself all these questions before investing in a particular location:

• How stable is the area?
• Is there an alternative part of town/country more qualified to invest in turnkey?
• How old is the property and when was it last renovated?
• What kind of experience does your turnkey supplier have?

6.Plan B – Many people believe that having a plan B means that you plan to fail. But when it comes to real estate investment planning, having a plan B simply means diversifying your portfolio. So, if you’ve started with single-family homes, after a few years you can start investing in multiplexes or even commercial property, depending on your personal preferences and market conditions.