Buying a turnkey investment might seem simple, but there are a few things you should know before you sign on the dotted line! Learn more turnkey properties in our latest post!
Investing in turnkey real estate might seem like a no-brainer, but there are a number of things to be aware of. This is especially true if you are buying a property out of state or sight unseen. Don’t rely on pictures alone, try to see the house for yourself, or have someone check it out on your behalf. The house is likely a huge investment, and should be treated as such!
Make Sure Turnkey Means What You Think It Means
Many companies will call a property turnkey, however, there are a number of cosmetic repairs and renovations required in order to rent it out at the price you need. Some people consider any property that isn’t completely dilapidated “turnkey” however, it may not be the move-in ready property you were envisioning. For example, there might not be any bathroom mirrors, or maybe the windows let in horrible drafts. These kinds of things can add up quickly, and will quite possibly make the deal less valuable than you thought.
Check Out The Neighborhood
What does the data have to say? Check the crime rates, vacancy rates and recent sales history of the area. Don’t try to save time on this part of the process. And don’t fall prey to ads that glorify the condition of the house. Drive the area yourself and talk to any residents you come across. And don’t just drive by during the day, make sure to check out the area at night too. Unless you live in the neighborhood yourself, you will not know what the area is like until you do your homework. Talking to people and exploring the area for yourself will give you the best insight.
Cheap Renovations and Repairs
Some investors will renovate a property, calling it “turnkey” however the repairs are shotty and done as cheaply as possible. You don’t want to live in a house that requires you to replace things right away. Nor do want this if you are having renters in the house. Renters are typically more tough on a house then owners are, and you don’t want to have to continually replace things. Some investors will spend as little as humanly possible renovating the home, make sure the repairs have been done correctly, by a licensed Chicago contractor.
Actual Vacancy Rates
The seller might tell you one thing, but be sure to look at the data yourself. Sure they might have tenants in there now but when is there lease up? What are other properties renting for in the area? Is there a demand? Being stuck owning a vacant property can cost you big time. You will not only be losing money on the rental income, but you will need to take on the utility costs a renter would likely be paying. Make sure you will have a renter in place, paying you a fair rent before making your purchase of a rental property in Chicago.
Buy From An Experienced Investor
When you purchase a turnkey investment property from Luxdoor Invest, you can rest assured it is actually turnkey. We work hard to revitalize properties, never using cheap materials or labor. Our properties are move-in ready, whether you are planning on living there yourself or renting it out to someone else you can be sure you are finding a high-quality house in the Chicago area.