Money is an important aspect of life today. It is involved in almost all aspects of life. The only thing more important than money is the source to multiply it constantly. As the world moves forward hoarding something of worth like money is never a good idea. Therefore the concept of investment comes into picture.
Investment in a lay man’s term is an opportunity where a person forgoes his current consumption so that he/she would be over-compensated for it in the future. An investor is a person who takes the risk of using his present surplus to constantly multiply his dormant funds. Every investment opportunity starts with the promise of good returns. One such opportunity is the Turnkey real estates. Turnkey properties are such type of properties that are readily available for investment without injection of extra funds for repair, modification etc. just by turning the key of decision of purchase. The number of Turnkey investments is constantly on the rise due to rise of busy corporates and professionals who can’t afford to spend time on modification and repair of each and every asset that they invest in.
Long term investment- short term living
Turnkey properties have ushered in a new culture among investors. With the availability of ready apartments, the buyers prefer to live in the property in the short term gaining utility from the asset. In the long run, the assets are converted to investments by making them available as rented apartments. This enables the investor to gain maximum utility from trade and investment. Many people who are looking to purchase apartments are switching to turnkey estates because it requires no repairs and can be turned into a rented apartment any day that the investor desires. And after a while, if there is a need for moving then the asset still generates revenue for the buyer in the form of rent.
Why
Regular investment options might have been viable in earlier times but in today’s market, a commodity that saves time is the best commodity available. Regular real estate needs time and attention of the investor after purchase in the modification and repair of it which most of the large scale buyers aren’t comfortable with. The existence of an option like turnkey properties that don’t require much time after the purchase which provides the incentive for more investors to participate and invest in the market thus helping the market in functioning smoothly without stagnation and slow growth.
How
Purchasing a house used to be an easy process because most buyers believed the fact they would invest most the money in repair and modification of the apartment post the purchase which usually turned to be bad decisions as both the purchase and repair would stretch their budget over their planned line. In the course of years, the process of purchase has improved drastically. With the dawn of the internet and mass media mechanisms, the distance between the investors/buyer and seller has reduced very rapidly. Many sellers of turnkey apartments are readily available via online portals or via advertisements in mass media.
Conversion
Along with the boom in turnkey investments, there has also been a rise in a phenomenon where the property is converted into a turnkey property. One of the popular methods for conversion of investments into turnkey is hiring a management company to look after the investments in a portfolio and which satisfies the needs of the investor. Right from repairing the broken tap to cutting the grass, the management looks after all aspects of the home thus making a home into a readily available investment that can be rented out for revenue generation.
Risk
Every good investment has the potential to generate a return. But what exactly is ‘return’. It is the compensation to the investor for putting forth his money without the knowledge of the future and thus inheriting the risk of the investment. No investment is risk-free and an investment which is risk-free cannot generate returns. Turnkey investments also bring with it certain elements of risk that the investor has to inherit.
One risk that a turnkey investment faces is the problem of rising taxes and falling property rates. The sky-rocketing tax rate can lead to huge losses as rent rate cannot be increased at such a rapid rate. This is one of the reasons many dream investments have turned to rubble in places with unstable tax rates. The return of a turnkey investment is dependent upon the occupancy of the property. There have been numerous cases where investments lay barren and vacant losing value over the course of time. Therefore it is always advised that turnkey investors keep an emergency buffer amount so that this amount can bail them out of a crunching situation with minimum damage.
Conclusion
The era of turnkey investment has brought good spirit and motivation for the investors. This market has the potential to grow into a big sector in the future because it provides the investors the most important thing, time.
