January 19, 2026 | 4 Minute Read
Real estate investors are often sold on turnkey rentals as the easiest way to build passive income. Meanwhile, the BRRRR strategy (Buy, Rehab, Rent, Refinance, Repeat) is positioned as the fast lane to scaling—if you’re willing to do the work.
Let’s compare them side by side using real numbers, real tradeoffs, and the realities of each.
Turnkey Rental Strategy
A turnkey property is fully renovated, rented, and often managed for you before purchase. You’re buying a stabilized asset at retail pricing.
Example: $150,000 Turnkey Rental
Purchase & Financing
Purchase price: $150,000
Down payment (25%): $37,500
Loan amount: $112,500
Interest rate: 7.0%, 30-year fixed
Monthly mortgage (P&I): $748
Monthly Income
Rent: $1,400
Monthly Expenses
Property taxes: $150
Insurance: $75
Property management (10%): $140
Maintenance & reserves: $100
Total non-mortgage expenses: $465
Total Monthly Costs
Mortgage: $748
Other expenses: $465
Total expenses: $1,213
Monthly Cash Flow
$1,400 rent − $1,213 expenses
$187/month cash flow
Annual Snapshot
Annual cash flow: $2,244
Cash invested: $37,500
Cash-on-cash return: 6%
Benefits of Turnkey
Very little time involvement
No rehab or construction risk
Easier conventional financing
Predictable income on day one
Works well for out-of-state investors. If you are not local, then a turnkey real investment would be recommended.
Negatives of Turnkey
Purchased at full retail value
Minimal forced appreciation
Cash flow is modest
Capital is locked in
Scaling requires continual new cash
Turnkey takeaway: You’re buying stability and convenience—not leverage or velocity.
BRRRR Strategy
BRRRR focuses on buying distressed assets, creating value through rehab, then refinancing based on after-repair value (ARV).
Example: BRRRR Deal
Acquisition & Rehab
Purchase price: $130,000
Renovation: $40,000
Total investment: $170,000
ARV: $240,000
Refinance
Refinance at 75% LTV: $180,000
Capital recovered: $170,000
Cash left in deal: $0
Rental Performance
Rent: $2,000/month
New mortgage (P&I): $1,050
Expenses (taxes, insurance, maintenance, management): $650
Total expenses: $1,700
Monthly Cash Flow
$2,000 − $1,700
$300/month cash flow
Benefits of BRRRR
Forced appreciation
Capital recycled instead of trapped
Stronger cash flow
Faster portfolio scaling
Long-term equity growth
Inflation-protected fixed debt
- Ideal if you are local to the property
Negatives of BRRRR
Rehab risk and timeline pressure
Requires active involvement or systems
Financing is more complex
Appraisal risk
No cash flow until stabilized and rented for 4-6 months
BRRRR takeaway: You trade effort for control, equity, and exponential growth.
Side-by-Side Comparison
| Metric | Turnkey | BRRRR |
|---|---|---|
| Purchase Basis | Retail | Discounted |
| Rehab | None | Required |
| Time Involvement | Low | High |
| Cash Flow | $187/month | $300+/month |
| Equity Creation | Market-driven | Forced |
| Capital Reuse | None | High |
| Scalability | Moderate | Fast |
A $150,000 turnkey deal can absolutely work—it provides stable income with minimal friction and ideal for out of state investors. But the tradeoff is capital efficiency. Your money stays locked, and growth is slow.
BRRRR, when executed correctly, allows you to:
Reuse the same capital
Increase cash flow
Build equity faster
Scale without constantly injecting new cash
But, the right strategy depends on one thing:
Are you local or out of state to the property you are purchasing? This will guide you in determining your risk factors when deciding which approach to take.