Buying and selling a house can involve a lot of time and hassle…
Turnkey properties are ideal for anyone who wants the house-buying process to be ‘short and sweet’.
But what is a turnkey house? And is it right for you?
Read our blog below to find out.
What is a turnkey property?
A turnkey property is fully renovated and furnished when you buy it. All you need to do is “turn the key” – it’s already ready to live in or rent out.
The main goal of a turnkey property is convenience. Buyers don’t need to buy and transport furniture, for example, which is ideal for:
- Holiday homes
- First-time buyers
- The short-term rental market
- Corporate housing (for companies employees)
- Buyers and sellers looking to complete house sales quickly.
And others.
Turnkey houses vs furnished houses
Turnkey houses are not the same as furnished houses.
The main difference between them is that turnkey implies fully renovated, ready to live in, and – in rental cases – managed. By contrast, furnished simply means a property comes with furniture.
Turnkey properties and management companies
Many turnkey properties already have a management company in place.
This means investors don’t have to find suitable tenants and manage properties. And tenants can have property issues handled by professionals.
Turnkey properties and newbuild developments
Turnkey properties are prevalent with newbuilds.
The developer will invest in giving it a distinct appearance with matching furniture. This translates into a higher price when listed on the market.
Are turnkey properties only for investors?
No. There’s no denying that property investors and developers often view turnkey houses favourably.
That’s because they can rent it out immediately, with minimal hassle. But plenty of other people are interested in turnkey houses.
Furniture in turnkey properties
Furniture is a big part of the appeal to many buyers of turnkey properties.
However, some will buy a turnkey property and then sell its furniture.
This may appear to defy the point of buying a turnkey property in the first place. However, they are often listed on the open market, where they find buyers who want the property but not the furniture.
How to find turnkey properties
There are several ways to find turnkey properties.
Local estate agents should be able to offer them, especially those specialising in short-term rentals.
Online estate agents might also highlight them in their website listings.
Developers of new build estates also likely have many available. They often need to be contacted directly (rather than via estate agents).
Property management companies and agents might also be willing to put potential buyers or renters in touch with sellers or landlords.
Turnkey properties are common in areas with high quantities of renters.
Advantages of buying a turnkey property
Convenience
Turnkey properties are ideal for buyers and landlords looking to avoid the hassle of decoration, furnishing, repairs, or renovation.
Potential for profit
A turnkey house sells and lets out for more, too. This is ideal for the person that owns the property.
Of course, this owner will have costs associated with buying furniture and managing the property. But they can regain this long-term if they manage everything well.
Disadvantages of buying a turnkey property
Taste
There’s no guarantee that buyers or renters will like what the previous owner has done with the house.
Perhaps the furniture isn’t to their taste. Or maybe you’d prefer the house to be laid out entirely differently.
Costs
Buying or renting a turnkey property comes at a higher up-front price.
Landlords and investors also have management costs to cover. Tenants will often find this reflected in their rent.
Is a turnkey property right for me?
Whether you are a buyer or renter, the primary reason for choosing a turnkey property is convenience.
In other words, people who don’t want to spend time and effort setting up and managing property.
In some cases, buyers choose turnkey properties because of the profit they can make. Although up-front cost tends to be higher, the time saved can help seize opportunities, such as market trends.
However, turnkey properties are an unnecessary cost for buyers working with thin profit margins. Renovating and managing the property themselves can be much more cost-effective.
For buyers and renters who own furniture, these properties can cost more, too. After all, selling one furniture set takes time and effort and might include storage costs.
