“Turnkey” is a real estate term commonly used to describe properties that are move-in ready. However, it is common for people to get really excited over this term and just get let down later. That’s because the term can be misleading, especially for new homebuyers.
The idea of purchasing a home that is ready for you to move in without repairing, preparing, or updating anything is highly desirable – and that’s why it’s so marketable. Sadly, that is the very reason you have to keep an eye out for the term as it could be misleading.
What is a Turnkey House?
When you are buying a home you may consider a few different types. Besides a move-in ready home, you may choose a fixer-upper, a home with upgrades, or even a house with a few updates needed but in overall good condition. While there are many kinds of homes for sale, purchasing a turn key home is not out of reach for many people as prices on new homes are still affordable.
What Does Turnkey Mean in Real Estate?
When you check home listings you may notice one key phrase that makes most buyer’s excited: turnkey. Essentially, this means that the house is ready right now. There is no need to wait, repair anything, or dig deeper into inspections or any other services. You can just buy the house, turn the key, and come home. That’s it. But is it?
What to Look For in a Turn Key Home?
Turnkey homes are beautiful, but they are not all created equal. In fact, many turnkey properties can be considered fixer-uppers even though they are clean and ready for move-in. There could be any number of little lingering problems around the home, regardless of the fact that you can move in right away.
Sometimes, this is simply because to make a home “turn key,” sellers may prioritize the turnkey aspect of the home over other factors. Other times, it leaves a loophole for deceptive marketing used to cover up a flipped house designed to be restored simply for profit. This type of home can be misleading, causing many people to ask, “What does turnkey mean in real estate?”
Some downsides of turnkey properties include these red flags:
- False advertising
- Overpriced
- Not actually turnkey
- Investors cutting corners
- Poor cleaning
- Exterior damage
- Structural breakdown
- Heating or cooling system failure
- Plumbing problems
- Roof damage
Watch out for these issues when shopping for your new home. The word “turnkey,” is relative, so you will need to keep the idea subjective in your mind. When using the phrase “turnkey property” in real estate, remember that it is a loose adjective, and things may not look the way you expect them to.
Never fear! Simply use caution when shopping for turnkey properties and keep a close eye out for homes that are being flipped (turned around). When a flipped house is bought and sold, it is usually done quickly and thus corners often get cut. This may leave things undone around the home, that you may need to clean, assemble, or otherwise improve, and it is important to be prepared.
How To Avoid Problems With a Turnkey Property
The term “turnkey” is commonly used in real estate to describe homes that are ready for you to move in. Well… that is what it is supposed to mean. However, the term turnkey property may let you down.
Most people take the term literally and expect to simply be able to turn the key to their new home, but that’s not always the case. In some cases, home sellers and real estate investors will take advantage of the market, listing homes with this key phrase, but not actually delivering. Oftentimes, the problems end up shocking new homebuyers and dampening their homebuying experience.
Don’t purchase a turnkey home until you view the property yourself – in person. You may also choose to hire an inspector to help pinpoint any potential problems with the home before you close the deal. Other signs that the home you are looking at is not actually turnkey include inexperienced operators, a limited portfolio, poor organization, low-quality renovations, and more.
