I’ve been wanting to write this post for a while.
Since I started reading CashFlowDiaries, that turnkey real estate bug has been biting me, hard… Which is why I cleared my newly created Motif Investing account, paid off my credit card debt, and hastily increased my credit score by more than 100 points in two months.
Yes, I really wanted to get a turnkey rental property, as soon as possible. I was not crazy. That 20+% cash on cash return is simply irresistible to me. As I rolled up my sleeves to analyze turnkey properties available in the market, I was slightly disappointed to find that those high cash on cash(COC) return properties are not what you can come across every day. I’ve been actively looking for a couple of month now – the best I’ve COC return I’ve seen is only around 10%, with most of others hovering around 4-8%, and the more recent ones seeming to be even lower, indicating market saturation.
So now the question is, is it still worth getting a turnkey property when the COC return is only 0-10%? Or what cash flow will justify a turnkey rental property to be worth investing?
How I determine cash on cash return