The San Jose real estate market is beginning to see recovery after a rocky few years. If you've held back from property investment, now may be a good time to try your hand at real estate.
However, property investment comes with risks. It's also a steep learning curve for many owners, whether that's juggling maintenance complaints from tenants or figuring out how to write a lease agreement.
But there is another option. We'll explain in this guide the pros and cons of choosing the turnkey property management route instead.
What Is Turnkey Property Management?
There are many types of property management, and turnkey is one of them. Turnkey property management is a full-service solution for real estate investors.
It's relatively new but growing in popularity in San Jose and other parts of the United States.
If you want to own a property, this service will provide ready-to-rent real estate.
The management service will also take on tasks like the buying process, maintenance, and renovation. They'll also secure tenants for your property.
Pros of Turnkey Property Management
There are good reasons why turnkey solutions are increasingly popular. Here are some of the advantages for landlords:
Turnkey property management is a simple model and convenient for landlords. Investors can reap the financial rewards without getting involved in everyday issues like building repairs.
That's beneficial for investors. Many have other daily responsibilities and don't want to handle property issues.
It's a Better Option for Cash Flow
After spending sizeable sums on a property, most real estate investors face a gap before making financial returns. That can cause problems like cash flow issues.
Turnkey management means you can get the rental going from day one and begin earning money from your investment.
You'll Get Expertise
When you choose turnkey solutions, you deal with professionals with extensive property management experience.
They'll know the small details that are highly beneficial for your investment, like how to price the rental property or screen tenants.
It's Lower Risk
Real estate investors find it easier to diversify their investments by going down the turnkey route. That helps reduce the risk of putting all your money into one expensive investment.
Also, having professionals handle repairs and renovations is a sound way to manage risk. They are more likely to spot potentially costly problems early.
The Cons of Turnkey Property Management
Like any investment option, turnkey solutions have some disadvantages. Here is what you need to know:
If you want complete control over your property, turnkey solutions are not right. It means delegating many of the daily decisions to the property management company.
If property management is a long-term career goal, you'll lose the opportunity to learn on the job when using a property management company. You may become reliant on an external company throughout your career.
Getting Started With Real Estate
You can choose to jump in feet first with your real estate investments. But if you lack experience in the industry, it's a high-risk strategy. Many investors find that turnkey property management is a smarter alternative.
To explore this further, check out the property management services we offer at PMI San Jose.