How do property investors calculate their offer price?

Property investors calculate their offer price by starting with realistic market value, then adjusting for refurbishment costs, holding and funding costs, risk, and their intended exit strategy. The final figure reflects risk management rather than asking price alone.

Estate agents typically price property to attract interest in an open market.
Investors price property to manage downside risk.

An investor’s offer reflects:

• uncertainty around resale or refinancing
• time the capital will be tied up
• potential cost overruns
• market movement during ownership
   

This difference often explains why investor offers sit below asking price.

While each deal is assessed individually, most investors review:

• Comparable sales: recent sold prices, not asking prices
• Property condition: visible defects and required works
• Refurbishment costs: including contingency buffers
• Holding costs: finance, utilities, council tax, insurance
• Exit assumptions: resale value or rental performance
• Risk margin: allowance for uncertainty
   

Each factor reduces risk rather than increasing profit.

Understanding how offers are calculated helps sellers:

• compare routes realistically
• decide whether certainty outweighs price
• avoid frustration caused by mismatched expectations
   

The seller always retains control over whether to proceed.

This information is particularly useful for:

• sellers comparing investor offers with open-market pricing
• owners of properties needing work
• sellers considering speed or certainty