Chicago Property Management Blog

The Pros and Cons of Turnkey Real Estate

The Pros and Cons of Turnkey Real Estate

Do a little research on real estate investing, and you’ll likely come across the term “turnkey real estate.” Advocates of turnkey real estate brag that it’s among the easiest ways to earn income from a rental property. But does that mean turnkey real estate is right for you?

We’ll help you evaluate the pros and cons of turnkey real estate so that you can make an informed decision about your real estate investment strategy.

What Is Turnkey Real Estate?

Turnkey real estate refers to any property that’s been rehabbed and is rent-ready. This term means that a tenant simply needs to “turn the key” and unlock the door once rental agreements have been signed.

Investing in turnkey real estate usually means purchasing the property once it’s been rehabbed and is move-in ready. Turnkey properties are common when a landlord rents a property at a distance since the rehab has been performed on the front end and therefore should reduce maintenance and repairs going forward.

The Pros of Turnkey Real Estate

There are many advantages of turnkey real estate, including:

Lower Maintenance

Investors love the move-in-ready condition of turnkey properties. While someone else handles the appraisals, maintenance, and other essentials, you’ll be able to use the property as a source of passive income. Instead of worrying about maintenance and upkeep, your main focus will be on obtaining renters.

Lower Vacancy Rates

With a move-in-ready property, there will be no delay in getting tenants. You’ll be able to fill rental units faster, which means you’ll have quicker, direct access to a stable source of rental income. Even when you have regular renter turnover, turnkey units are more attractive since they typically have more modern features.

Greater Diversity in Your Investment Portfolio

Turnkey properties are easy to invest in, even if you don’t live in the area where the property is located. This ease can help you diversify your investments, creating multiple streams of income in a variety of geographic locations. 

This approach can be particularly effective if other areas have a booming real estate market and you wish to take advantage of favorable market conditions in a different geographic region.

The Cons of Turnkey Real Estate

At the same time, there are some disadvantages of turnkey real estate, including:

Higher Cost

The move-in ready condition of a turnkey property comes with a price attached. When a property has demanded a lot of improvements or modernization, it can greatly increase the market value. This upgrading will make it easier to rent, but it will also mean a higher upfront cost for real estate investors.

Less Control

Some investors like to make their own decisions when it comes to the aesthetics and design of a property or even choose what type of fixtures or appliances to include. 

Turnkey real estate means that these decisions will have been made for you. While turnkey properties are often sleek and modern, investors will have no real say in their design, layout, etc.

Greater Distance

It’s not a requirement for turnkey real estate properties to be located in a different region from the investor, but many investors purchase properties in other communities as a means of diversifying their portfolios. 

This distance makes it harder to address unforeseen issues or perform emergency maintenance, at least without enlisting the aid of other professionals.

Is Turnkey Real Estate Right for Me?

Deciding to invest in a turnkey property is a major decision, one that should be made with these factors in mind. Typically, turnkey real estate investment favors short-term investors who are comfortable with a higher upfront cost or simply want to avoid maintenance costs associated with an older building.

A turnkey real estate property enables you to start making money right away, and it can also be an effective strategy if you choose to invest in a property, rent it out, and hang on to it for the long haul. However, if you’re aiming to save some money and possibly force some appreciation (through rehab and/or upgrades), you may consider skipping the turnkey solution and investing in a property on your own terms.

Whatever route you take, we’re here to help. Landmark Property Management has helped countless real estate investors, and we would love to speak with you. If you have any questions or are interested in learning from the best property management company in Chicago, don’t hesitate to reach out! You can contact us at Landmark Property Management via phone at 312-313-8553 or send us an email at As always, I hope we provided you with some valuable nuggets and I appreciate you stopping by!