As an investor, you have more important things to do with your time than finding new tenants, chasing after late rent payments, fixing toilets, and replacing refrigerators. For you, the point of purchasing a rental property (whether residential or commercial) is to collect passive income and diversify your portfolio while you look for more investment opportunities. This is why turnkey properties in Dallas make the most sense.
However, if you want to make the most income on any real estate investment, you need to know how to find the best properties. Instead of stumbling blindly through the Dallas investment real estate market, follow these simple steps and you’ll find the best properties for your portfolio to give you long-term appreciation while offering short-term income.
Identify Your Market
First of all, do you know what kind of property you want to invest in? In the Dallas area, residential rental real estate is incredibly hot right now and shows no sign of dipping any time soon. Thus, a lot of savvy investors are purchasing turnkey apartments and houses that come with property management and tenants. While you’ll pay a bit of a premium for properties that are not only ready to rent but also come with tenant acquisition and property management, you will also have no work to do to begin collecting monthly income immediately.
On the other end of the turnkey spectrum, Dallas has a huge demand for medical real estate right now, as well. Investing in a doctor’s office, urgent care facility, or senior home could be very lucrative and a great way to diversify your investment portfolio. With this kind of investment, though, you will likely be purchasing stock in an REIT or investing in a real estate mutual fund, and you will actually own equity shares in the property, rather than actually taking ownership of the property itself.
If you want to outright own a piece of property that makes you a profit as soon as you purchase it, you’ll likely be in the market for a house or condo property. Whichever way you go, though, be sure to do your research and identify your market and what kind of property you’re interested in for your portfolio.
Research the Property Management Firm
When you start looking at turnkey properties in Dallas, remember that you are not just buying the house and the land it sits on. You’re also paying a premium for property management. So, in addition to looking at the actual property to ensure that it’s what you want, you also need to look into the property management company you’ll be partnering with.
Before you agree to anything, first find out a few key things about them. You’ll want to know how many properties they currently manage, how many people they have on staff, and how many properties their current corporate infrastructure will handle. Then you’ll want to know how they intend to grow and continue to provide top-notch management service for their existing properties.
You’ll also want to ask about tenant acquisition, average lease lengths, average tenant turnover rate, and what they do to retain tenants. Whenever possible, ask for references and follow up on them. The more you know about your property management company, the more you’ll know about what you can expect when you purchase your turnkey property.
Do the Math
Finally, before you buy the property, do a little bit of simple arithmetic. Take the amount you’ll receive in monthly income on the turnkey property and subtract your mortgage, property management costs, and property taxes from that. If the result isn’t a positive number, then move on to the next property. If it looks like a good number that you can work with to grow your wealth and increase your future investment opportunities, then it may be time to sign on the dotted line.
Now you have a guide to finding and choosing turnkey properties in Dallas. With this information, you should be able to make the best choice for your investment portfolio.