What is a turnkey home | Does turnkey mean furnished | Turnkey price | Is a turnkey home right for you? | Tips for buying a turnkey home | FAQs
A turnkey home is move-in ready. It could be new or newly renovated. Ideally, all you'll need to do is bring your possessions, "turn the key," and make yourself at home.
💡 Key takeaways
- A turnkey home is move-in ready — though not necessarily furnished.
- Turnkey construction means you are buying a home that is still under construction, that you can make modifications to as it's being built, and move in right after it's complete.
- Turnkeys cost more than average, but might be less expensive in the long run.
Does turnkey mean furnished?
A turnkey home may be furnished, but it doesn't have to be. It does typically mean that you won't have to paint, repair, or renovate to make it livable.
Most real estate listings will say if a home comes furnished or not. Your real estate agent may be able to negotiate whether the furnishings are added to the sales contract. In any case, don't fall in love with the furnishings until you confirm whether they're included.
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What does turnkey price mean?
Most sellers charge more for a turnkey home, because needed repairs, upgrades and finishes have been done for you, saving you money up front.
"Turnkey homes can cost 5–25% more than a home that needs varying degrees of TLC, depending on the market," says Isaiah Henry, CEO of Seabreeze, a property management company. And a 2019 Porch.com survey says the average purchase price of a fixer-upper was $199,819, while people who bought a turnkey house spent an average of $250,469.
Typical fixer-upper repair costs (2022)
A turnkey home could save you money in the long run (which could be 10–12 years, depending on maintenance needs), particularly if you can't make repairs on a fixer-upper home right away.
Living with air leaks from old windows or an inefficient HVAC system could cost you money on your monthly utility bills until you're able to make repairs. And having these issues taken care of before moving in — and on the seller's dime — means these systems should stay in worker order longer.
What is turnkey construction?
Turnkey construction usually means you're getting a loan for a home that is under construction. The loan could be from a third-party mortgage broker or one that works with the property developer.
The appeal of turnkey construction is being able to:
- Make changes to the property WHILE it's being built, which allows for some degree of customization
- Move in as soon as construction is complete
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Should you buy a turnkey home?
✅ A turnkey home is right for you if:
- You want to buy a home that doesn't need to be rehabbed or fixed up in any way in order to move in.
- You want to be able to move in or rent out the home immediately. If available, you can ask the property manager to find or vet tenants as you close.
❌ A turnkey home is wrong for you if:
- You don't want to pay more for the convenience of not having to rehab or fix up your home.
- You want a home that you can customize to your taste. A turnkey home is done for you, according to someone else's tastes and desires. With a fixer upper, if you don't like the kitchen, you could knock out a wall and add an island. With a turnkey, that's more difficult and pricey, and defeats the purpose of buying a turnkey.
Who are turnkey homes for?
A turnkey home appeals to busy individuals (executives, families with young children, etc.) or investors who want to be able to have tenants move in immediately without doing any fixes or remodeling.
Many home buyers — millennials in particular — were willing to buy fixer-uppers between 2020 and 2022 to get an affordable home. But others searched for turnkey homes to move into a new home quickly during a particularly hot market, when so many people were eager to move.
"As millennials are having an issue with increasing mortgage rates, they are more interested in purchasing turnkey houses as they are instantly ready and comparatively cheaper," says Dustin Fox, a realtor and owner of Fox Teams in Fairfax, VA. "First-time homeowners who are in a bit of a financial crunch target these types of houses. For the last couple of years, the popularity of turnkey houses has grown in large numbers."
| Pros and cons of buying a turnkey home | |
|---|---|
| ✅ Move-in ready | ❌ Costs more than a traditional home |
| ✅ Can be rented to tenants right away | ❌ Hard to customize unless you buy it during construction |
Buying a turnkey property? Things to remember
Before purchasing a turnkey home, get a basic inspection, and ask to see a summary of recent renovations.
Also, you should personally examine the work that was done to eyeball any possible issues. Sometimes flippers do shoddy, quick work, and call the result a turnkey home when it's not.
If the inspection reveals any issues, decide if the cost or time of repairs negates the benefits you were looking to gain with a turnkey home. If turnkey features you expect are lacking, try to negotiate a better price.
If a property management company is involved, do some research on its track record — and get any promised services in writing.
Some questions to ask property managers:
- How much experience does the company have?
- What services do they offer?
- What are the fees for these services?
Possible services offered include:
- Cleaning services
- Background checks on tenants
- Filling tenant vacancies
- Maintenance
- Rent collection
- Signing leases
👇 Why you should trust us
This article draws on research and interviews with real estate professionals with experience in buying, selling, and investing. Subject matter experts who contributed to this piece include:
Sources
We also drew on data from Porch.com and Home Advisor.
Home Advisor estimates for
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FAQs about turnkey homes
What does turnkey home mean?
Usually means a home that is move-in ready. It could be newly renovated or updated.
Does turnkey mean furnished?
A turnkey home may be furnished, but not necessarily. The listing will likely indicate whether it is furnished or not.
What does turnkey price mean?
Most sellers charge more for a turnkey home (ranging 5–25%) because of the convenience of not having to do extra work on the property to get it ready for move in.
Should I buy a turnkey home?
A turnkey home is right for you if you want to be able to move in or rent out the home immediately without any renovations or repairs. A turnkey home is wrong for you if you don't want to pay more for the convenience of a home that's move-in ready but not customizable.
