Memphis Real Estate Investing

3 min read

Filling Your Portfolio with Turnkey Properties Leads to Success

Fri, Oct 4, 2019

turnkeyproperties-realestateinvestmentportfolio-mitigatingriskIf you’ve ever watched any sort of house-hunting show, you will inevitably hear the phrase, “totally turnkey,” as a pitch for the ease of a property. No renovations need doing, it is a move-in ready home. However, the context of “turnkey” for a real estate investor is a little bit more complicated. More nuanced.

The property is absolutely move-in ready. While there is a definite appeal there for the residents, there is an undeniable appeal for the investor, too. Turnkey properties are more than just the convenience of a property that is ready-to-rent from the get-go.

For real estate investors of all kinds, investing in turnkey real estate at the heart of your portfolio sets you up for long-term success, regardless of how you diversify your portfolio. Why is turnkey real estate so crucial in an investment portfolio?

4 Reasons Turnkey Real Estate Sets a Solid Foundation for Real Estate Investors

Your risk is lower.

When it comes to investing in anything, risk is always a part of the equation. The building blocks of your investment portfolio should be lower-risk, stable investments. For the real estate investor, turnkey real estate is the ideal solution. While other types of real estate investments can come with a plethora of variables, particularly when it comes to property acquisition and management, turnkey real estate removes these risk burdens from the owner.

Acquiring the property, renovating the property, and management of the property are all left to your turnkey provider and their experienced teams. For the real estate investor, this means you can devote your energy and time to other pursuits. 

This risk management is particularly helpful for new real estate investors, who are more prone to making mistakes early on. 

For a long-term portfolio, even if you diversify into other kinds of investments, having these turnkey properties at its core (particularly if they are diversified and spread among different markets) helps an investor manage and reduce their overall risk.

Check out: Building a Real Estate Investing Strategy: Minimize Risk in Your Investments

Passive cash flow supports your ambitions.

One of the biggest advantages of investing in turnkey real estate is the passive cash flow generated through your rental properties. While alone, a few properties don’t bring in a mind-blowing amount of income, your cash flow grows along with your portfolio. Other investments typically bring in one major payout rather than a steady stream of income.

Though this income can be impacted by uncontrollable factors (such as vacancies or a need for major repairs), it is absolutely one of the biggest perks to turnkey investing. This cash flow can, in turn, help you finance other investments, savings and retirement funds, and other investments, among other things.

You learn the fundamentals.

New real estate investors are up against more than they realize. If you go at it alone, you’re bound to run into trouble at one point or another. The process of acquiring a property, renovating it, and renting it out is incredibly challenging if you are doing it yourself and relying on a few disconnected professionals. 

During the process of buying a property, you may run into a variety of walls that impede your progress and ability to invest. Poor inspection results, bidding wars, and bad tenants are all potential pitfalls.

A new investor going at it alone takes on a heap of unnecessary risk. When you invest turnkey, however, you have the chance to grow and truly learn about real estate, your own ambitions, and how to grow a strong real estate portfolio. Your turnkey provider removes many of the burdens faced by investors. As they keep things running smoothly, you are better able to learn the ropes and acclimate to the process of investing in real estate.

This allows you to navigate investing in real estate without ever making the costly errors that so many new investors fall prey to.

You start with a support network.

One of the most valuable things that a real estate investor can build for themselves is a network of support. Some do this from the ground-up: identifying their own management teams, portfolio advisers, sellers and renovation teams. The benefit of a turnkey investment company is that not only does your first turnkey investment come with every team you could possibly need to run a smooth and profitable rental property, but you have your own team that is always on the same page.

Because they’re all in and out of the same place, there is common ground and communication. We all want the same thing. Whether it’s your management team with their boots on the ground or your portfolio adviser helping you take the next best steps, the goal is always the same: your success in real estate investment.

 

Get started today with turnkey real estate investment.

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Chris Clothier
Written by Chris Clothier

Entrepreneur, writer, speaker, ultra-endurance athlete, husband & father of five beautiful children. Chris puts these natural talents on display every day. As a partner at Memphis Invest, Chris addresses small and large audiences of real estate investors and business professionals nationwide several times each year. Chris is also an active writer, weekly publishing real estate, leadership, and endurance training articles.

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