Turnkey rentals can be Professional HMOs….Social HMOs that are on guaranteed rents for 5 years….or even buy to lets. The fact is that so many new property investors delude themselves into thinking they can source…refurbish and mostly manage an investment property. We have seen so many burned for a myriad of reasons…Yet there are sourcers who are honourable and hard working. Actually a women who sells our Professional HMOs took exception to one of our blog posts.
Turn key properties are not for everyone and not every new property investor can actually succeed in a professional hmo or even a buy to let. Since buying a turnkey rental property is already cashing flowing, in our opinion it is a smart investment. The primary argument that comes up against turnkeys is that they are sold more or less at market value, so you can’t force appreciation on them, and being able to do that is the crux of rental property investing success. What has been happening in Manchester and Salford more specifically is that prices have risen dramatically. In 2015 we sold a gent from Saudi Arabia a group of Social HMOs. One in particular in Salford we sold him for 99,999. It was cash flowing close to 11,000 per year net. Fast forward, he sold that property in todays worlds pricing at 132,000 plus collected several years of rents. Yes, he is a very smart investor. Actually he has a PHD in Finance. However, he did not need the PHD in finance to make a wise decision.
By creating appreciation—buying something under market value and then doing something to increase that value—is one of the most solid ways of profiting on an investment property. However, one needs to be realistic. What about their day time job. Time is money….let alone the knowledge and learning curve. We are constantly learning on every property.
Turnkeys offer you a property where all of this work has already been done, and therefore very little of your time is required to invest in the property. While you will then pay closer to market value for the property because you aren’t the one forcing the appreciation, you also aren’t required to invest all of that work, effort, skill, or headache into the property. You can also still be plenty profitable with the property if you buy right and manage your investment right.
So who are the best property investors for turn key….From our experience selling Professional HMOs & other properties….it is very clear who are the best candidates…
- New Property Investors
- Busy professional people who have liquidity but don’t have either the knowledge or the time
- Hands off property investors….ie People who have liquidity who want to mitigate the headaches of property…plus mitigate the volatility in the Stock market.
If you can’t find distressed properties, don’t have the intricate knowledge required for refurbishing HMOs, can not rehab them timely, or you have money sitting around doing nothing in the bank ( which is only protected up to 85,000), turnkeys are an excellent option to provide income from property.