The real estate world is always evolving, and with 2025 already in motion, many investors are asking: Are turnkey rental properties still worth it?

At RP Capital Lending, we work with a wide range of real estate investors from first-time buyers to seasoned professionals and we see firsthand the appeal of turnkey homes. They promise quick entry into rental markets, passive income from day one, and peace of mind with property management already in place. But like every investment, they come with their pros and cons.

Let’s break it down in detail so you can make the best decision for your investment strategy.

What Exactly Are Turnkey Properties?

A turnkey property is a fully renovated, move-in ready rental home. In many cases, these properties already have tenants in place and are professionally managed. Essentially, the investor just “turns the key” and starts collecting rent.

Why investors like turnkey homes:

• No stress about renovations or repairs.

• No waiting for tenants you can earn income immediately.

• Often comes bundled with a property management company to handle day-to-day operations.

For busy professionals, out-of-state investors, or anyone seeking a more hands-off real estate strategy, turnkey properties can feel like a shortcut to success.

Why Turnkey Properties Still Matter in 2025

Even with rising interest rates and a shifting housing market, turnkey investments continue to attract attention. Here’s why they remain relevant:

1. Streamlined entry point – In today’s competitive market, finding, renovating, and leasing a property can take months. Turnkey homes let you skip this process entirely.

2. Lower risk exposure – Because the property is already rent-ready, you don’t face renovation delays, unexpected repair bills, or tenant-search headaches.

3. Strong rental demand – Housing affordability challenges mean more people are renting, which boosts demand for turnkey rentals.

4. Predictable cash flow – Since rent is flowing from day one, investors can rely on more stable returns compared to renovation-heavy strategies.

Key Benefits of Turnkey Properties

When evaluating if turnkey properties are worth your time and money, it’s important to weigh the benefits carefully:

1. Lower Investment Risk

Traditional real estate flips often come with hidden repair costs or tenant challenges. With turnkey properties, those risks are minimized. The property is already inspected, updated, and occupied.

2. Hassle-Free Passive Income

With property management included, investors don’t have to worry about rent collection, maintenance requests, or tenant disputes. It’s a truly hands-off income stream ideal if you want to focus on scaling your portfolio or if you live far from the property’s location.

3. Portfolio Diversification

Turnkey properties make it easy to expand beyond your local market. For example, an investor living in New York can own rental properties in Florida or Texas without needing to be physically present. This geographic diversity can protect you from local market downturns.

4. Immediate Cash Flow

Perhaps the biggest perk: your property starts paying you immediately. That cash flow can cover your mortgage, build reserves, or be reinvested into additional properties.

Drawbacks of Turnkey Properties

Of course, no investment is perfect. Here are the challenges you should watch out for:

1. Property Management Fees

The convenience of professional management comes at a price. Most companies charge anywhere from 8%–12% of monthly rent, which eats into your net returns.

2. Vacancy Risk

Even if you buy a fully leased property, tenants can leave. Long vacancies or poor management can hurt your cash flow. Choosing a trustworthy property manager is crucial.

3. Limited Value-Add Opportunities

Unlike fixer-uppers, turnkey homes don’t leave much room to “force appreciation” through upgrades. You’re essentially locked into market-based appreciation.

4. Risk of Overpaying

Turnkey homes are often sold at a premium for convenience. Without proper market research and an independent appraisal, you may end up paying more than the property is worth.

5. Renovation Quality Concerns

Some turnkey providers may cut corners with cosmetic fixes. Always request inspection reports and verify the quality of renovations.

Alternatives to Turnkey Investing

If you’re not sure turnkey fits your goals, consider these alternatives:

1. BRRRR Method (Buy, Rehab, Rent, Refinance, Repeat)

A hands-on strategy where you buy undervalued properties, renovate them, rent them out, then refinance to pull out equity and repeat the process. It’s more labor-intensive but can generate higher returns.

2. Real Estate Syndication

This involves pooling your money with other investors to buy larger properties (like apartment complexes). You can stay passive while still gaining exposure to bigger deals.

3. REITs (Real Estate Investment Trusts)

Publicly traded funds that invest in real estate. These are extremely liquid and easy to manage, though you lose the tax benefits and control of direct ownership.

Final Takeaways: Are Turnkey Properties Worth It?

So, are turnkey rentals worth it in 2025?

✅ Yes, if you value convenience, stability, and passive income.
✅ Yes, if you’re looking to invest out-of-state without added stress.
❌ No, if you want maximum equity growth through renovations.
❌ No, if you’re not comfortable paying management fees or premiums.

The key is due diligence. Research the market, verify the renovations, and partner with a reliable property manager. With the right approach, turnkey rentals can provide stable, long-term wealth.

How RP Capital Lending Can Help

At RP Capital Lending, we specialize in providing flexible real estate financing solutions from construction loans to fix-and-flip loans to rental property loans. Whether you’re investing in turnkey properties or pursuing a BRRRR strategy, we can help you secure the capital you need to scale your portfolio.

📞 Ready to explore financing options for your next property? Contact us today and let’s build your real estate success together.

✅ FAQs About Turnkey Properties

1. What is a turnkey rental property?
A turnkey property is a fully renovated, rent-ready home, often with tenants and management already in place, allowing investors to start earning rental income immediately.

2. Are turnkey properties profitable in 2025?
Yes, turnkey properties can still be profitable in 2025, especially for investors seeking stable, passive income. However, profits depend on market conditions, management fees, and purchase price.

3. What are the biggest risks of turnkey properties?
The main risks include overpaying for the property, vacancy gaps, and poor renovation quality. Partnering with trusted providers and conducting due diligence can help reduce these risks.

4. How do turnkey properties compare to the BRRRR method?
Turnkey properties are hassle-free but limit equity growth opportunities. The BRRRR method requires more work but offers greater control and long-term wealth-building potential.

5. Can I finance a turnkey property with RP Capital Lending?
Absolutely! RP Capital Lending provides flexible loan options for turnkey rental purchases as well as other real estate strategies like fix-and-flip or BRRRR investments.