Real estate investment has become a Millennials game. Members of the younger generation are themselves putting off home ownership, while looking for high performance investments that won’t take up much of their time and don’t require hands-on DIY work to become tenant-ready. This search for low-maintenance investment opportunities can lead investors on a wild goose chase as they attempt to find relatively safe transactions that offer long-term yield and a self-sustaining property model.
The truth is that turnkey is not a get-rich-quick scheme, and it involves making solid choices and not just buying whatever comes along because the marketing is slick and implies huge returns on a small investment. So how do you avoid falling into the trap of big hype and overstated promises? It can be confusing sorting out all of the investment property advice in Dallas.
The best thing you can do as an investor is seek out not only properties that have a promising future as far as ROI, but those that are suitable candidates for smooth management and upkeep. By its very definition, turnkey means that the property is already renovated (or that step is being taken care of by the management company), and either has tenants, or tenants will be installed by the management company.
What can get in the way of these foundation steps? When you only go for properties because the initial outlay is cheap and promises of lavish returns are being bandied about, there can be serious underlying issues that turn the entire thing into a nightmare you can’t get out of soon enough.
The problem is that when the price is rock bottom – under $50k is considered a “cheap rental” in most average markets – there’s not enough padding built into the transaction to allow for proper reno. When renovation prices have to be kept on the cheap, you end up with deferred maintenance costs, which then eat into your rent ratio over the long term. Not only that, but deferred maintenance can mean malcontent tenants, and unhappy tenants translate into high turnover, which parlays into more expenses for the owner – you.
Put Quality First
Protect yourself from money pits by going for quality, customer service, and long-term hands-free sustainability over shiny promises on low-end properties. While a higher quality property managed by a company that provides a high level of service and comprehensive communications with clients and tenants will cost you more on the front-end, these are the properties that are going to demonstrate the best results. This will materialize in the form of happier tenants, fewer deferred maintenance issues, less oversight required on your part, and a smoother overall transaction for everyone involved.
Make sure you’re not only choosing high quality turnkey rentals in Dallas that have been renovated right the first time, but that your investment and management company have the staffing and experience to provide top notch services and prompt communication.