TURN-KEY OR DIY: PURCHASING RENTAL PROPERTIES THAT MAKE SENSE FOR YOU TRACY ROYCE
to outsource out, if nothing else. A month or two of vacancy can reduce your cash flow quite rapidly, so having
the property rented out again as quickly as possible is imperative.
Returns, Stress, and Your Bottom Line
Your litmus for a good return will of course be personal, but the
bottom line also becomes qualitative. If you’re a rehabber that has a
reliable crew, access to hard money, can afford the down payments
associated with non-traditional lending, and can handle the stress of
the process from A to Z, turn-key properties are not the way to go.
If you’re an “arm-chair” investor, and would rather look at the sorts of returns you’ll make with an end product, are
OK with paying the business their fees (vs. paying a Realtor a commission to find you properties), and are less
inclined to be hands on, a turn-key property could be a good fit as an investment strategy.
There are investors actively making 15+/-% by finding, purchasing, rehabbing, and renting out single family
homes. Margins for turnkey properties can be competitive, and of course will also be market specific.
As real estate becomes “hot” again, it may be worth exploring purchasing properties as an investment where little
more than your evaluation and qualification is required. If you’re a hands-on investor that runs a lean and mean
business, taking the DIY approach could reward you with larger margins.
It’s up to you to decide what methodology works best for your investment strategy, and you should always be
active in the due diligence, regardless of the purchasing channel.
Tracy Royce
Tracy is an Arizona Short Sale Realtor, Investor, Rehabber, and Foreclosure Expert. She also is
an avid blogger, vlogger and consultant on all things Arizona Foreclosures.
1602; Fax: 888-501-3383
Tracy “Royce of Real Estate”: http://royceofrealestate.com/
Phone: 602-741-