More and more sellers are throwing out the term“ turnkey rental property” in hopes they can attract outofstate buyers. But what do they really mean by‘ turnkey’?
I heard a fellow podcaster state recently that all you have to do to provide turnkey property is buy a home, get it rented, put it under management and voila! You can flip“ turnkey” property at retail pricing to eager outofstate investors!
This is certainly not our definition of turnkey.
Unfortunately, turnkey means absolutely nothing anymore.
Uneducated buyers assume turnkey means that you don’ t have to do a thing. The belief( or false hope) is that someone else does the buying, renovating, leasing and management of your rental property, and all you have to do is deposit rent checks.
Unfortunately, most of these misinformed investors end up writing checks and making few deposits. The problem is that most people trust what other people tell them. They believe the marketing message. For example, have you ever bought Fiji water? The
The Dangers of Turn‐Key
Rental Property
marketing is beautiful and makes you feel like you’ re drinking right out of a waterfall on a tropical island. But the Cleveland Water Department ran tests comparing Fiji Water to Cleveland tap water and found arsenic, human feces and other contaminants in the Fiji Water.
False advertising is often used to market“ turnkey properties.”
At Real Wealth, we are constantly bombarded with companies who want to come speak on our podcasts. Before they can do so, they must be thoroughly vetted to determine if their version of“ turnkey” is the same as ours. I noticed one company was especially savvy at internet marketing. From the looks of their marketing, they appeared to have quite an impressive system in place, so I decided to pay a visit.
What I found was the owners were very young, in their 20s and had only a couple of years’ experience in real estate. When they showed me their available properties, I thought we were walking through their newly acquired homes just out of foreclosure and in prerenovation phase. You can imagine my horror when they proudly told me these were their turnkey homes. It appeared that no renovation had been done at all. In fact, there was not even a handle on the very old, rusty oven. I told them their properties did not meet our strict criteria, and they quickly replied,“ That’ s OK. We’ ve already sold these to outofstate investors. We have a wait list.” I asked if the buyers ever came to see what they were buying. They said,“ Never.”
These kids were expert internet marketers. They were not turnkey rental operators. I was amazed at how trusting their buyers must have been to unknowingly purchase such garbage.
By Kathy Fettke
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