When you’ve decided to sell a property it won’t be the last difficult decision you make. There are many more along the way. One of the hardest decisions to make is whether you should renovate the property or sell it as is. There can be a lot to gain from renovating a property. Renovations can add significant value to your property. Making changes to your property can cost over $50,000 but it may be worth it in the long run if you end up selling your house for an additional $100, 000 than what you expected.
Alternatively, you could sell the house as-is. Some potential buyers may not be interested in keeping the property as it is. They may have grand visions of completely demolishing the house to make way for a new house or multiple townhouses. So the extra investment into renovations could all be for nothing. It’s scenarios like this that begs the question, “should I renovate before selling?”
One of the best ways to decide on renovating is to weigh up all your options. Think about the cost of the renovations and what absolutely must be done to make the property liveable. Consider what features of the house make it desirable. Features like close proximity to schools, public transport, and freeways may already make it extremely valuable and eliminate the need for pricey renovations.
Here we’ll break down all the factors you should consider before renovations a property for sale. With the right information, you can make a more informed decision that can help make or save thousands during the process of selling your house.
Changes you should make before selling any house
Not every house needs a total makeover before it’s ready for advertising. But there are certain things every property seller should consider to help the house look more appealing and liveable. Here are our thoughts on what they should be:
- A thorough clean of the property
- Touchup any damaged paint or plasterwork
- Eliminate clutter and hide any highly personal items
- Fix any obvious signs of damage or defects
- Keep the garden looking tid
Make it more of a business decision
Imagine for a second that you are a real estate agent renovating a house before putting it on the market. You’ve done extensive research and have found out what buyers in your area will be looking for. But now comes the question of whether or not you should do renovations with your personal taste in mind or keep things neutral so as to appeal more broadly.
When deciding this, always remember: What would make YOUR perfect house? And then ask yourself if those features would also help sell houses like yours faster than similar homes without them – which is basically the goal here.
Try not to overcapitalise
Overcapitalising is a common mistake when buying or renovating to sell. It can result in the property not being worth as much and leaving less money for you at closing time. Don’t waste your hard-earned cash on over-improvements that will never be paid off, just because they look nicer now.
You should have your property appraised by an expert before making any decisions about renovations. Imagine finding out your home only has a $100,000 increase in value after spending $200,000 for expensive upgrades. It could mean a massive loss for you because it’s not possible to make up for the money used on renovations.
So do your research and think very carefully before you decide to renovate for the sole purpose of selling. Start having early conversations with your local real estate agent or vendor’s advocate before you make a final decision. A local real estate professional should be able to give you good advice on renovations for your property. They will have seen hundreds of properties selling in your local area. They will know what renovations are effective for adding value and which ones should be ignored.
Research the current market value of your property
To properly understand how much value a renovation can give you it’s important to do your research. One of the first things you should do is get your home valued by a qualified real estate agent. A local expert can tell you the current market value of your property and how much it may have increased in value since purchasing it.
A real estate agent should also be able to tell you how similar properties in the area compare. If you have a three-bedroom house then they should be able to offer you comparisons of three bedroom houses with renovations and those without. Also remember that most suburbs have their own median sale prices and upper threshold. In some cases, you may have areas within a suburb that are different because of the house styles or streetscapes. One half of a suburb may be $100,000 cheaper than the average house price of the ones on the opposite side.
Find out what your potential buyers want
It can be really tempting not to renovate your house before a sale. You might really love that pretty pink bathroom or those blue tiles in the kitchen but potential buyers may not be on board with these features. The best thing you can do is talk to a real estate agent about buyer demographics for your local suburb.
Find out what your ideal buyer demographic wants and learn how home renovations have helped sales for other properties nearby. Local real estate agents can give you a good insight into what are popular features for buyers in your area.
So consider whether your property has desirable features and if it would be worth investing in. If so, then get creative with the interior design of your space to make sure that you’re giving potential homebuyers something or even everything they want in a house.
Decide exactly how much you’re willing to spend
Once you know your budget, then you’ll be able to determine whether or not any renovations will help make your property more appealing. Are you considering cosmetic renovations like painting, floor sanding or replacing old carpet? Consider this easy calculation; put aside 10 per cent of your property’s current market value away for your renovations budget.
Here’s a perfect example of how you could use this simple calculation. Imagine your property’s current market value sits at around $600,000. A reasonable investment for renovations would be $60,000. With a set number in mind, it suddenly becomes a lot easier to avoid overspending on renovations. Try to stick under this 10 per cent limit for your next renovation.
Get more advice from an experienced real estate professional today
Real estate agents aren’t the only professionals you can rely on for solid advice on renovating and selling property. Consider talking to a local vendor’s advocate. This real estate professional can provide you with valuable advice on selling a house. They can act as a middleman between you and your real estate agent.
A vendors agent can help take a lot of stress out of the selling process. They can engage with your real estate agent and ensure they have carried out the right market research for your property.
With the right information on the local market, you can make a more informed decision about renovating your property for sale. Talk to a vendor’s advocate from Vendor Advocate Melb today for more advice.