Jamie JohnsonBy Jamie Johnson, WCI Contributor

Real estate investing can diversify your portfolio outside of the stock market, and it’s a mostly passive form of investing. If you’re looking for a rental home that doesn’t require much upfront work, a turnkey property may be a good choice.

When you buy a turnkey property, there’s very little you need to do to manage or maintain the property. And since you buy the home move-in ready, you can begin renting it out immediately. But turnkey properties aren’t the best fit for every investor, so you should consider the pros and cons first. 


What Is a Turnkey Property?

When you buy a turnkey property, it’s immediately available to rent out. The property has already been fully renovated and repaired, and it often comes fully furnished. In many cases, there will already be a tenant living in the home, and it may come with a property manager. 

Because there are no updates required, turnkey properties are more expensive than other rental properties. However, they’re an attractive option for investors who don’t want to wait months to begin making money off their investment. And since the home comes with a property manager, you won’t have to spend your time dealing with tenants. 

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BRRRR Method vs. Turnkey Rentals


The Benefits of Turnkey Properties

Here are the biggest benefits of buying a turnkey property:

  • Start making money immediately: A turnkey property has already gone through the necessary repairs before you buy it. It also comes fully renovated with furniture, so it’s ready to rent out immediately with very little effort on your part. In comparison, a traditional rental property may require months of repairs before it's ready to rent out.  
  • Saves you time: Turnkey properties often come with a property manager who handles the day-to-day tasks for you. If an appliance breaks, the renter will call the property manager who will handle the situation on your behalf. This allows you to take a hands-off approach, and it can save you a lot of time. 
  • Fewer surprise costs: Anytime you buy a property and plan to update it yourself, there’s always a good chance the repair costs will be higher than you initially anticipated. You can never completely eliminate unexpected costs, but they’ll likely be lower with turnkey properties. 
  • Invest anywhere: Because you don’t have to regularly visit a turnkey property to make repairs or deal with tenants, you’re not limited to a specific geographic location. Having a property manager who handles these tasks for you means you can buy a home anywhere in the country. 


The Drawbacks of Turnkey Properties

turnkey properties

Turnkey properties aren’t the right choice for every investor—here are the biggest downsides to consider:

  • More expensive: Because turnkey properties have already been renovated and often come fully furnished, they’re more expensive than other rental properties. That means you may need more upfront capital to buy the property, and you may have to rent it out for more money to earn a profit. 
  • Less control: When you buy a turnkey property, your success is largely determined by the quality of the property manager. If you get stuck with a bad property manager who chooses the wrong tenants or doesn’t sufficiently maintain the home, your investment will tank. 
  • Mediocre returns: When you buy a rental property and fix it up, it tends to appreciate in value very quickly. In comparison, turnkey homes appreciate in value much more slowly, and they can even decrease if that market suddenly shifts. 
  • Potential for scams: Properties are often advertised as turnkey but have hidden problems that are easily overlooked, especially if you can't view the property in person. 

More information here:

Why Is There So Much Hype in Real Estate Investing?


Are Turnkey Properties the Right Choice for You?

With so many real estate investing options available, are turnkey properties the best choice for you? Maybe, but you need to do your homework first. Visit the property in person, even if that means flying to another state.

When you visit the property and walk through it, you’ll see things that are easy to hide in an online listing. For example, you’ll notice if the furniture is old and outdated or if the house desperately needs to be painted. You’ll also get a sense of whether the neighborhood is growing, which should play a huge role in your decision. 

You should also spring for a home inspection, even if you don’t think the property needs it. A home inspection can uncover hidden problems, and a good report will give you peace of mind. 

Finally, make sure you understand the fine print before buying the house. If the home already comes with tenants, can you evict them if they stop paying their rent? Can you get rid of the current property manager if you’re unhappy with their performance? Doing your due diligence will increase the odds that you’ll find an excellent property and get the best returns on your investment. 


WCI’s No Hype Real Estate Investing is the best real estate course on the planet and the best way to get started in this exciting (and profitable) asset class. Taught by Dr. Jim Dahle and more than a dozen other experts, this course is packed with more than 25 hours of content, and it gives potential investors the foundation they need. If you’re interested in real estate investing, you can’t afford to miss the No Hype Real Estate Investing course!


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