Attention, all turnkey investors! What do you think makes a market great for turnkey investing? That’s what we’ll be exploring today. Finding the right market for you to start or expand your investing portfolio can be a bit of a science. There are so many markets out there – from ones in your backyard to out-of-country markets – that getting started can take some time to sort out all of your options. Hipster believes, however, that the best turnkey markets share similar qualities that make for a great investing choice.
In this post, we’ll share five markers of a great turnkey real estate market. You may have noticed that our What’s Available Wednesday posts zero in on a select few markets – we do that because we believe these are the top ones, with the best suppliers in the country. Just as there are things to look for when you buy a bike, a car or a house, there are some key things to look for when you invest in a certain turnkey market. Here’s our guide for finding a quality turnkey market to enhance your investing portfolio!
1. Timing is Everything
You know that saying, “Buy low, sell high”? It’s popular for a reason. In real estate, there is an ebb and flow to things. Markets climb, markets fall. The best turnkey markets are those that are priced several percentage points below their peak market prices. Don’t buy in the middle of a down turn – be patient and find a market that has stopped plummeting and is showing signs of heading back up again.
2. Don’t Get Caught Holding an Empty Bag
If you buy it, they will come? Maybe that worked in Field of Dreams, but when it comes to investing, it’s a whole different tune. To minimize profit-eating vacancies, and to find the best tenants, it is imperative that you look for a market that has low vacancy rates so that you’re not in lots of competition with other investors. Be sure your market has lots of rental demand without lots of vacant units.
3. Seek Stability
So much depends upon your ability to rent out your properties. The context of your market, such as employers, colleges, schools and the quality of the neighborhood, impacts your success (or lack thereof). Be on the lookout for markets that have jobs, education, transportation and green spaces that will attract tenants to your neck of the woods.
4. Glimpse into The Future
Time to get out your crystal ball! Ok, that’s an overstatement. Still, it’s important to look into the future of the market you’re considering. Is a major employer in the area struggling? Is there speculation the employer may close? What does new commercial construction look like? Are there any new plans for transportation, dumps or prisons that could either significantly increase or decrease the property’s potential value?
5. Amenities Matter
In zeroing in on your next market, think about the amenities the market offers – both to you, and to your tenants. Is the state landlord friendly? Are there great property managers available to run the property in your absence? For tenants, are there decent schools? Parks? Supermarkets? How far away is a train station? What about the highway?
Great prices don’t a great market make. When you buy into a turnkey market, look for quality, longevity and stability in addition to having great timing. Currently, Hipster has our sights set on Philadelphia. We will keep you posted, and you can check out the Latest Good Deals to see great turnkeys available for you!