21 MAY 2021 277
Property that works for you is a new format for real estate investment. Financial crises are just a reminder of how important it is to have a stable passive income. The real estate market is inherently quite conservative, but in recent years a new trend has been noticeable. And it is a turnkey real estate investment or the purchase of apartments in a new or fully restored building with a ready-made renovation. Such property objects can be immediately rented or resold. It seems a great technique for big agencies with powerful real estate business management software. But individuals that seek to get a profit in this way should be aware of some nuances they may come across.
The main risks of turnkey investments
Real estate companies have an extensive database and big turnover, and they are not so sensitive to idle periods and slow money returns. But individuals may not be ready for these obstacles:
Risk of downtime and slow payback. An apartment makes money when tenants live in it. But it is really the case that you find one and the same tenants for years. Frequent change of tenants only adds to various household hassles. And even small downtime periods together make a serious loss of income. Moreover, these gaps increase the expected payback term. With its growth, unforeseen expenses for minor repairs also accumulate. And it may become an annoying vicious circle when the payback moment is postponed every time to an uncertain date.
Risk of unreliable tenants. The homeowner is always looking for responsible tenants who regularly pay rent, do not damage apartment furniture, appliances and decoration, and do not cause complaints from neighbors. Disloyal tenants are the cause of additional expenses (for renovations, purchase of new property) and increase the likelihood of downtime due to the need to look for new tenants.
Time-consuming risk. Many investors believe that renting out real estate is an easy passive income. In practice, this type of earnings takes a lot of time and effort. So, first, you need to choose the right property for purchase, then make repairs, advertise for rent or cooperate with realtors, arrange displays, monitor tenants, pay rent and utility bills, carefully approach the search for new tenants, perform various household work, from general cleaning before minor repairs.
Partner with professionals
If you still decide that this form of investment is right for you, it is better to hire professionals to do all administrative work for you. Companies working in the real estate business have managed to digitize real estate business long ago. They use real estate management system and can reach an extensive client database. Thus, such a partner has more instruments for screening a potential tenant and finding a new tenant in the record terms. You would like to know how to control your real estate agents? As a client, you will have access to an agency application to see the status of your property and all the profits it generates.
If you still want to do everything on your own and have several property objects to rent out, you may build mobile app for real estate for your own use. This solution is really affordable as you do not have to pay for the whole development process. Ready-to-use applications will be just ok for your small business. It can become the right starting point in developing your investment projects. Besides, you will get full control over it directly from your smartphone. Application for your business will become a major step forward for the whole business.