I purchased my first eight single-family rental properties without ever physically visiting them.
In fact, it would be nearly five years before I visited and toured any of my real estate investments.
Since first investing in these rental properties as a remote real estate investor, each of them offered cash flow while appreciating nicely (thank you post-pandemic inflation).
Investing in real estate sight unseen might seem daunting, but it's an increasingly popular method, especially as turnkey single-family real estate investing has grown in popularity.
When properly executed, this approach allows investors to purchase properties without physically visiting them, leveraging technology and trusted professional service providers in the acquisition process.
As one who has personally been through this process, I'll discuss some of the process highlights, pros, cons and steps to ensure successful investments in real estate sight unseen.
Turnkey real estate refers to properties that are ready for immediate occupancy or rental, with minimal to no additional work required by the investor.
In fact, the best turnkey properties already have have cash-flow with stabilized renters in-tow.
These "turnkey" properties are often managed by companies specializing in preparing and maintaining them, making them particularly appealing for sight-unseen investments.
The turnkey model is ideal for investors seeking passive income and real estate appreciation all while investing from a distance (it even works great for foreigners looking to invest in US real estate).
In short, turnkey properties provide a hassle-free entry point into the single-family real estate market.
Turnkey investors are often those who don't personally have the time to fully vet properties and investment property managers.
They are more often investors with disposable and investable money but little time.
And the properties they invest in are typically in markets with higher capitalization rates several states away.
When you can't see it, touch it and inspect it, there is greater risk.
Unless, of course, you have a trusted professional service provider that can do that for you.
To keep investors in focus, we have the following mantra:
But your first "at bat" will be the most important.
Here's how to make it great...
Start by identifying a high-potential local rental market for single-family turnkey properties.
This typically includes markets with higher cap rates, high demand and good overall metrics.
Analyze market trends, rental property values, and rental demand.
Use online resources, market reports, and real estate websites to gather data and make informed decisions.
Research could include everything from schools to local employers.
Ideally, you want a rental property in a market that will be viable far into the future.
This is the MOST critical step investing in a property sight unseen real estate investment strategy.
Find reputable real estate agents, property managers, and inspectors who have experience with investing in a house sight unseen and turnkey properties.
Your team should be trustworthy, knowledgeable, and able to provide detailed reports and updates.
Trust is paramount, especially if you're a thousand miles away and completely detached from your tenants.
Vet investment property managers by reading online reviews and interviewing your proposed local property management partner.
Make sure your contracts can be severed for lack of performance.
Hire fast and fire slow!
Use virtual tours, 3D walkthroughs, and detailed property photos to evaluate properties remotely.
Utilize online platforms and tools for property assessment and investment analysis.
Technology can provide a comprehensive view of the property and its surroundings, helping you make informed decisions.
Your property inspection should be recent and pictures and walk-through videos should be requested to ensure there are no gotchas.
Ideally, and typically, many turnkey properties are actually new builds, which completely avoids many of the issues of aged homes.
New builds also typically include warrantees to cover any initial issues.
Review property reports, inspection results, and maintenance records carefully.
Verify the credentials and track record of the turnkey provider (and their proposed property manager) to ensure they have a history of delivering quality properties and reliable property management services.
Explore financing options suitable for turnkey investments.
Ensure you have pre-approval for mortgage or investment loans, and understand the terms and conditions.
Having financing in place will streamline the purchasing process.
Negotiate the terms and finalize the deal with your real estate agent.
Ensure all legal and contractual obligations are met, and thoroughly review the purchase agreement before signing.
Your real estate agent or turnkey real estate provider will guide you through the closing process.
Establish clear communication with your property manager to ensure smooth post-purchase management.
If tenants are in place and rents are stabilized, 9/10ths of the initial risk in property management is cleared, but the long-term relationship is truly what matters most.
Set up regular updates and reports on property performance to stay informed about your investment.
A good property manager will handle tenant issues, maintenance, and other aspects of property management.
Again, finding a good property management partner is the MOST critical step in your turnkey journey.
To mitigate potential risks associated with sight-unseen real estate investing, follow these recommendations:
Investing in real estate sight unseen, especially in the single-family turnkey market, offers a unique opportunity for savvy investors.
By following the steps outlined in this guide, conducting thorough research, and building a reliable team, you can make informed decisions and enjoy the benefits of real estate investing from a distance.
Ready to explore turnkey real estate investment opportunities?
Visit our turnkey properties at Invest.net to find opportunities that fit your specific investment goals.
We also have investment consultants on staff, including your dedicated real estate agent, who can provide personalized advice and services to help you succeed in your real estate investment journey.
Contact us today to get started on your path to passive income and financial growth through real estate investing.
