You’ve read up a little about building out passive income through rental properties. You’ve decided that turn key real estate is the way to go for you. But did you know that once you actually make the decision to buy a turn key property what's equally important to your success is what and where you buy, and the team you select to help you?

It makes sense for most beginners to buy turn key real estate and consider single-family residential homes or a small duplex (nothing bigger at the start) in a market with:

• Favorable rental-to-home-price ratios
• Stable employment
• Strong rental cultures

Here’s an example of a favorable rental-to-home-price ratio for your first purchase:

• A single-family home in the Midwest in the $50,000-$80,000 range
• Rent is around $800 per month and produces $500 cash flow (after all expenses)
• The home is located in a reasonable neighborhood with average occupancy rates

For many folks this probably means buying out of state, so a well-vetted turn key real estate operator and property management company are essential to owning a home that’s been properly inspected so you know the overall condition. If you are buying out of state check out our free mini guide to buying out-of-state properties. The How-To’s section of HowManyDoors provides details about market-specific research, sourcing strategies and how to evaluate turn key real estate.

The second criteria to owning turn key real estate ensures people have jobs to pay the rent. Search for markets where unemployment is within 20% of the national average and is on the right trajectory. As a FREE member, learn about areas of the country I’ve highlighted that have low unemployment and viable industries that will stimulate job growth, which contribute to a favorable rental market.

The final criteria lends itself to locations with reasonable vacancy rates. I like less than 8%, and when combined with low entry prices makes for a good return on investment. A low vacancy rate means that people are renting instead of buying.

I’ve already done a little bit of the legwork for you. Some of the areas we where invest and own with strong rental cultures, favorable rental rates and lower home prices include:

• Cleveland, Ohio
• Indianapolis, Indiana
• Tampa, Florida
• Buffalo, New York

I found some very useful information while researching Indianapolis that helped me decide to purchase turn key real estate in this area. The region’s largest industry sectors by employment are manufacturing, healthcare, education, logistics, retail trade and entertainment. Forbes magazine recently ranked Indianapolis the 6th best city for jobs. In 2010, Indianapolis was rated the 10th best city for relocation by Yahoo! Real Estate and 10th among U.S. metropolitan areas for Gross Domestic Product growth.

You can read about all of these locations in our Market Reports available to all free members. The topics covered will help you evaluate any area where you are searching for turn key real estate opportunities. Key questions such as:

• Will it rent? What’s the vacancy rate for the area?
• What do tenants pay? Are rent prices increasing or decreasing?
• Are my renters aging baby boomers wanting access to recreation and medical services?
  Or are they young families who want good schools and parks?

All these questions plus expert recommendations are all answered in these reports.

Interviewing turn key providers before purchasing any turn key real estate should be a discussion around their approach and history. Check out the list of questions to ask when speaking to them in our Turn Key Rentals.

Although most turn key real estate comes with a property manager in place, it is still important that you interview the property manager. If you don’t like how they run their business or if you feel it’s not the right fit it’s always your option to find someone else. Check out the list of questions to ask when speaking to them in our Turn Key Rentals.

For many of you, there will always be situations where you have the motivation to invest in turn key real estate but for any variety of reasons the local market just doesn’t provide the right opportunities. So be prepared and download this FREE Mini Guide to Buying Out of State and understand the here versus there economics, the pros, cons and tips to managing remote investments.

By looking at a few simple facts like local industries, unemployment rates, job growth and household incomes you can start to build up a rental profile to make sure incomes can cover rents. Look online for articles and research on the local market and you will find a bunch of resources to evaluate turn key real estate in the area you’re interested. After nailing down an area you can move on to finding the right people to help you get you started. HowManyDoors has ALL the information you need to get you started on your path to success!