What Turn Key Really Means
The term “Turn Key” is used very often in the building industry, but most builders and customers tend to have a different interpretation of what “Turn Key” really means.
The proper reasoning behind calling something “Turn Key” should be simple – once the home is ready, all you need to do is move your furniture in and enjoy living in the home. This also applies for investment properties. A “Turn Key” investment property should be ready to hand over to a real estate agent once it’s finished and for the tenants to move straight in.
Yet time again, people are left with a mountain of work to do to get the home to a true “Turn Key” level, and most of the time this is simply because they haven`t considered all the miscellaneous items which need to be carried out for everything to be complete.
Let’s look at the items that distinguish a new build versus a turn key home. Item such as;
- Window Locks
- Block-out Blinds
- Concrete Driveway & Pathways
- Rear Concrete Areas and Pathways
- Front & Rear Landscaping
- Clothes Line
- TV Antenna
- House Numbers
- Door Bell
- Alarm System
- Side Gates
Now as you can see from the above list, it’s not just one of two items. Many builders tend to include several of the items in their “Turn Key” price, but not all of them.
As a home owner or property investor this raises two issues that need to be considered;
- Who’s going to organise and carry out the work and how long is it going to take?
Once your home is built, any work that’s incomplete will need to be organised, booked in and co-ordinated. This takes up considerable time and can also be costly depending on who you hire.
Many people also underestimate the time it take to find someone to carry out the work.
- What’s the additional cost of the work and are there funds allocated for it?
Don’t underestimate the costs involved in carrying out small jobs. They tend to be more costly for a reason and the expenses can add up.
And then there is the issue of making sure funds are available. When you move into a home you will always have associated costs such as removalists, electricity and phone connection fees and not to mention your new mortgage.
With investment properties, it’s a double whammy. Not only do you have all the associated costs that a home owner has, but you also have the potential loss of income. While you are co-ordinating the works to be carried out, each week that goes past is one week of lost rent and another week that the real estate agent can’t get tenants moved into your property.
Ideally you want to ensure when you are selecting a builder and a house and land package, the quotation or pricing they provide you with is complete and a true “Turn Key” home. This way you will save a lot of your own time and money. Another important thing to realise is that it also allows you to include all the costs into your mortgage, whether you are a First Home Buyer or Property Investor. It will work in your favour.
Instead of having to pay upfront $3,4,5 or 10 thousand dollars when the home is complete, you simply end up paying a little bit more on your mortgage every month. If you do have excess money, you have the option of spending it on furniture and white goods. Alternatively, if it’s an investment property you can utilise the money towards your mortgage repayments while you are waiting for tenants to move in.
In summary, understanding the costs associated with a true “Turn Key” home will allow you to organise yourself to ensure there are no surprises at the end of your project and a seamless transition from purchase and build to handing over the end product to you.