Not long ago, purchasing an investment property without setting foot inside seemed almost unthinkable. Today, however, it’s a go-to strategy for many real estate investors expanding their portfolios.
Across the country, thousands of out-of-state landlords are snapping up turnkey properties sight unseen, capitalizing on lucrative markets far from home.
When a promising investment opportunity catches your eye but your schedule doesn’t allow for an in-person visit, remote purchasing can be an efficient solution. In fact, this approach has become a popular choice among savvy investors.
Before jumping into that seemingly perfect deal you spotted, here’s what you need to know about buying turnkey properties sight unseen.
What are Turnkey Properties?
A turnkey property is a fully prepared, “ready-to-rent” investment. This means it’s either been recently renovated or kept in excellent condition, often requiring no additional work.
In some cases, the property may even come with tenants already in place. For investors looking to start generating income right away, a turnkey property offers an appealing and efficient opportunity.
How to Buy a Turnkey Property Sight Unseen
Buying a turnkey property sight unseen comes with risks, so it’s important to take extra steps to ensure you’re making a good investment.
1. Do Your Research
If visiting the property in person isn’t an option, investing time in thorough research is non-negotiable. Dive deep into the property details, the neighborhood, and the local rental market to ensure a well-informed decision.
Relying on a single source of information can be risky, too. Always cross-check key data points like cap rates, market trends, and rental demand across multiple credible sources to verify accuracy.
Understanding the neighborhood is equally important. What kind of tenants might the property attract? Are they likely to stay for the long term? What are the local crime rates? These factors can significantly impact your investment’s success.
The more comprehensive your research, the clearer your understanding of the property’s potential and the surrounding market conditions will be.
2. Tour the Property Virtually
Thanks to modern technology, you can explore a turnkey property remotely through virtual 3D tours, detailed videos, and high-quality photos. Ask the seller to arrange a virtual tour or provide a walkthrough video that explains the layout and highlights each room in the property.
Take the time to carefully review these materials. If anything seems unusual or out of place, don’t hesitate to raise your concerns with the seller to ensure clarity and transparency.
3. Review Inspection and Appraisal Reports
When purchasing a turnkey property sight unseen, third-party inspection and appraisal reports are crucial for making an informed decision. Carefully review these reports to identify any significant issues that might not be apparent in photos or videos.
These professional assessments provide invaluable insights into the property’s true condition and the future of your investment.
4. Perform Due Diligence
If you’re purchasing a property from a turnkey company, it’s essential to conduct thorough due diligence to confirm the company’s reliability, honesty, and legitimacy. Similarly, if the property comes with an existing property manager, take the time to research their reviews and evaluate their operational practices.
Ensuring you’re working with trustworthy professionals who have a solid reputation in the industry is key to making a confident and successful investment.
5. Interview Local Property Managers
If you’re buying a turnkey property sight unseen, it’s likely located far from where you live. In this case, finding a property management company will be essential for handling maintenance, rent collection, routine inspections, and overall management.
Before finalizing your purchase, take the time to interview local property managers. Choose one who provides all the services you need and whom you trust to safeguard and manage your investment effectively and maximize profit.
6. Secure Financing
You’ve done your due diligence, set up a property manager, and are confident in purchasing your turnkey property sight unseen. The next step is to secure your financing.
Now, since you are buying an out-of-state property, it may be helpful to use a local mortgage lender who knows the market and can add a personal touch to the experience.
7. Close on the Property
With everything in place, the settlement date has finally arrived. By granting your real estate agent power of attorney, you can skip attending the property closing in person. A few digital signatures and possibly a video conference call are all it takes for the property to officially become yours.
Benefits of Buying a Turnkey Property Sight Unseen
If you’re a Los Angeles real estate investor who’s always on the go, closing deals, and seeking your next profitable opportunity, purchasing a turnkey property sight unseen could be the perfect strategy for you.
Just some of the benefits of remotely purchasing a ready-to-rent investment property include:
- Better Investment Opportunities – By branching out to other real estate markets and locations across the country, you could find the next up-and-coming neighborhood where you can maximize your ROI.
- Save a Ton of Time – Depending on where the property is located, you could save days or even weeks of time that can be dedicated towards other lucrative opportunities.
- Immediate Rental Income – With turnkey properties, especially ones that already have tenants, investors can start earning rental income instantly.
Remember to always do due diligence and research before buying a turnkey property sight unseen to avoid making an expensive mistake.
Ensure the Success of Your Turnkey Property Investment with Lotus Property Services
Buying a turnkey property sight unseen can be an overwhelming process. That’s where Lotus Property Services can help!
As the area’s leading property management company, we ensure your property is taken excellent care of. From rent collection to maintenance coordination to routine inspections to detailed accounting and reporting, you never have to worry about a thing!
So, before you close on your turnkey property in Los Angeles, give us a call to see if we are a great fit to manage it!
If you enjoyed this article, make sure to read What Are the Best Questions to Ask When Buying Rental Property? next!