Author - Scott Conway, Realtor

Are remodeled turnkey properties worth the premium in SF?

Whether remodeled turnkey properties in San Francisco offer better long-term value depends on several factors: initial cost, quality of renovations, market trends, and your goals—investment or personal use. Let’s break it down.

Turnkey properties (fully renovated, move-in-ready homes) command a premium in San Francisco. Several recent listings, including 113 Gates, which had been completely remodeled in 2014, and other finished remodeling homes go over asking with multiple offers. But is the premium worth it? Listings on the San Francisco MLS like a 3-bed, 2-bath in Excelsior at $1.2 million or a 2-unit Noe Valley mixed-use building at $2.5 million, both recently gut-renovated. These prices reflect the city’s median home value of $1.175 million, but they’re often 20-30% higher than unrenovated comparables in the same neighborhoods. You’re paying upfront for someone else’s work. New kitchens, seismic retrofits, updated plumbing, and electrical are typically very appealing in today's home market. Buying a fixer-upper at, say, $900,000 and spending $300,000-$500,000 to remodel yourself can be a long painful process with many hurdles that can lead to extended wait periods or worse, including workmanship design that can lead to unknown issues down the road.

Long-term value hinges on execution. Quality renovations (e.g., permitted seismic upgrades, modern electrical) can reduce maintenance costs and boost resale appeal, especially in a market where buyers—often tech workers or investors—prioritize move-in readiness. A 2024 BancalSF report notes energy-efficient upgrades (think new windows, HVAC) and curb appeal add rental or resale value, critical in San Francisco’s competitive landscape. But if the work’s shoddy or unpermitted it's possible it was built out while cutting corners to save money. It also may not be to your taste or it could be overstyled or trendy for a quick flip. All of this could mean hidden costs. This translates to the necessity of due diligence before making that over-asking price offer (inspections, permit checks).

Market trends matter too. San Francisco’s home prices dipped a bit this last year. If prices stagnate or drop, that turnkey premium might not appreciate as fast as a cheaper, self-renovated property in a rising cycle. Yet, SF’s strong demand and chronic housing shortage suggest sustained value for well-located, updated homes.

For investors, turnkeys can cash flow faster. If you're looking for immediate rental income then a remodeled building makes a ton of difference. But cap rates in San Francisco are low (3-4% versus 6-8% in markets in TX), so your return might lag unless rents climb. For homeowners, it’s about time and hassle—paying more now to avoid reno headaches could be worth it if you value stability over max profit.

Compared to fixer-uppers, turnkeys trade sweat equity for convenience. A $900,000 unrenovated Victorian might net bigger gains if you oversee a $250,000 remodel and sell at $1.5 million in five years, assuming a 3% annual appreciation. But that assumes you nail the work and market timing, which is very difficult in this market. Finding contractors to engage the work with is incredibly challenging in our market. Turnkeys lock in value on day one, with less uncertainty.

So, are they a better deal long-term? If the remodel is top-notch, permitted, and in a prime spot (e.g., Noe Valley, Bernal Heights, Glen Park, Richmond, Pacific Heights, etc), yes—they minimize risk and upkeep while holding value in SF’s supply-constrained market. If the work’s dubious or overpriced, a fixer could outpace it with effort. It’s a bet on quality and location over bargain hunting. My advice is to always check permits, get a thorough inspection, and run the numbers for your timeline. What’s your priority: quick returns or playing the long game?