What is passive income? It’s very important to find the answer to this question because there are many myths attached to it. Many real estate gurus have taught their students that “passive income” means there will be no work involved. They won’t have to get their hands dirty, and the profit will just magically and consistently come in every month without having to lift a finger.
I would like to dismiss this myth by telling you that every successful investor in any industry will always be doing certain amount of work. It might involve overseeing of the investment portfolio, measuring profits or return on investment, or making adjustments.
In case of real estate investment, “passive” could be termed as something where you don’t necessarily have to do things like rehabbing the property or managing tenants. Services like turnkey investment give leverage to those investors who are looking for generating passive income without quitting their day jobs.
The thing is there is tremendous value in working with a company that has already dealt with most of the issues. They are experienced. They have been investors themselves and they are managing investment properties on a daily basis. You are actually paying for their experience, so you don’t make mistakes.
Turnkey Real Estate Companies
With turnkey, what actually happens is that you hire a turnkey company who have investment properties for sale. You check the properties, select the one that suits your investment portfolio and buy it. Every month, you get your monthly check from the rent after the deduction of turnkey company’s fees. This is the price you pay for highly-skilled professional management, which saves a lot of your time.
Some of the tasks that a turnkey company performs are:
- Handling phone calls, including late night emergency calls.
- Finding good tenants, meeting them, showing the properties, answering their questions and renting them out.
- Collecting rent from tenants every month on your behalf and disbursing funds to your bank account. If the tenant fails to pay rent on time, collecting the payment, including late fees. [Read More at Bigger Pockets]
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