Turnkey Property ( buy to let with built in management) works in several markets. Typically turnkey property markets work with the following criteria.
- Low housing prices
- Economy to support working class
- Landlord friendly
- Good enough profile to rent, not necessarily to buy
- Markets are not appreciating abnormally or at all
Liverpool is a prime example of a good turn key property market because it has a stable working class to employ solid lower to middle class jobs. Liverpool is a slow steady cash flow market. If you want rapid appreciation so that you can sell in 2 years, maybe Liverpool is not a good investment. However the type of properties we are targeting back in 2008 sold for 70k or even 80k. We have just started buying in Liverpool and have been very successful in buying. Our model is to refurbish….tenant……manage. These properties will rent between 425 to 450 per month. This means very high returns…double digits…especially if one were to entertain a mortgage.
All of this sounds great and only boils down to successful management. Without management the concept fails. My colleagues own 50 properties in that are similar in tenant profile in Manchester. The issue with Manchester is that investors have shifted out of London and moved upwards to the Northwest. The values are much tighter. Properties that we purchased at 50-60k in 2014 now are closer to 100k+. In Liverpool we can actually sell properties in the 50k range and the investor gets a double digit return.
Getting back to management my colleagues get paid directly from the council…they know how to deal with tenants and even evictions. Anyone can refurb a property….the key is management and high yields to offset eventual voids and maintenance.
Recent Comments