Buying investment property
Numbers first: a price that leaves room for profit, and the negotiating to get it.
An investor buys the numbers, not the house
Buying an investment property isn't like buying a home to live in. You're not falling in love with a kitchen. You're buying a deal. Whether you're renovating to resell or adding a rental to your portfolio, it's all about making money, and every decision starts there.
That changes how I help you. On a house that needs paint, carpet and repairs, we don't pay top dollar, because every dollar you overpay comes straight out of your profit. The price has to leave room for the work and for you to come out ahead.
Talk About an Investment
Negotiating like an investor
An investor needs an agent who can negotiate and doesn't mind hearing no. Sometimes that means going to the listing agent and laying it out: "My buyer is willing to buy this house, but he's going to put $50,000 worth of work into it. For him to make money, the price needs to be this."
It takes thick skin and a clear breakdown of the numbers, so the listing agent can take that explanation back to their seller and it makes sense. A lowball offer with no reasoning gets ignored. An offer with the repair math behind it gets a conversation.
In my experience, most investors won't touch a property unless there's $25,000 or more of profit in their pocket when it's all said and done. So before we write anything, we work backward from that: what the house will be worth when it's done, what the work costs, and what that leaves for the purchase price.
Rentals: will it pay for itself?
If you're buying a rental, the question is simpler and just as important. You'll buy the property for this much. Your mortgage payment will be this much. Can we rent it for more than the payment? If the rent doesn't beat the payment, it isn't making you money.
That's where an agent's experience matters, in knowing what a home in a given area will realistically rent for and what the payment will actually be, before you commit. We run those numbers on every property before we make an offer, not after.
Investment property across the areas I serve
Home base is Clarksville, and you can start with investment property in Clarksville. I also work across Middle Tennessee and southern Kentucky, including Christian County, Robertson County and Cheatham County. If you're buying to live in the home first, see VA and military buyers or first-time buyers.
The full buying process is in how I help you buy a home. Send me the property or the numbers you're working with, and we'll start there.
Frequently Asked Questions
How much should I offer on a house that needs work?
Work backward: what it's worth when finished, minus the cost of the work, minus the profit you need. In my experience most investors want $25,000 or more of profit when all is said and done.
How do I know if a rental will make money?
Compare the purchase price and resulting mortgage payment to what the home can realistically rent for. If the rent doesn't beat the payment, it isn't making you money.
Will a seller accept a low offer on a fixer-upper?
Sometimes. The key is showing the listing agent the repair math, so they can explain to their seller why the price needs to be where it is.
Investment Property by neighborhood
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Ready to make your move with Keri Gilles, REALTOR®?