Turnkey Rental ROI Calculator
Turnkey rental properties — pre-renovated, tenanted, and professionally managed from day one — are sold to passive out-of-state investors. Calculate the real ROI after management fee, vacancy, capex, and appreciation.
| Annual rent | — |
| Annual P&I | — |
| Tax + insurance | — |
| Vacancy | — |
| Property management | — |
| Capex | — |
| Net cash flow / year | — |
Turnkey rentals — properties sold to investors fully renovated, tenanted, and managed — appeal to passive out-of-state buyers. The trade-off: you pay a premium for the convenience and rely on the turnkey provider's property management. Real ROI depends heavily on management quality and disciplined capex reserves, not just headline cap rate.
What Drives Turnkey Returns
Headline cap rate is the marketing number. Real ROI depends on: (1) actual vacancy (advertised 5% is often 10–12%), (2) capex reserves (skip these and your 8% cash-on-cash becomes –2% when the AC and roof hit), (3) property management quality (10–12% PM fee + tenant placement + lease renewal), and (4) appreciation, which is mostly market-driven.
Underwriting Mistakes
Trusting the seller's pro forma. Skipping capex reserves to inflate cash-on-cash. Underestimating vacancy in low-rent neighborhoods. Not modeling rent growth realistically. Ignoring property tax reassessment after purchase. Each of these can flip a positive cash flow deal into negative.
Out-of-State Investor Checklist
Visit the market and the property before buying. Get an independent appraisal and inspection (not the turnkey provider's). Interview 2+ property managers, not just the in-house option. Verify rent comps independently (Rentometer + local Craigslist). Check eviction laws — tenant-friendly states (CA, NY, NJ) make turnover risky.
Last updated May 2026. Sources: BiggerPockets Calculators, Roofstock Marketplace.