Homeowners spend several billion dollars on home renovations annually and many of those are getting ready to sell. You have to spend money to make money, right? It’s complicated.
The decision to renovate is much easier when you picture a soaker tub and marble counters that you know you plan to enjoy for the next decade. It isn’t quite as simple when you plan to renovate and walk away.
Ultimately, it all comes down to return on investment and how marketable your home would be as is. Certain renovations recover more of the investment than others, but there is a multitude of factors to consider when making the decision.
When selling as-is makes the most sense
To sell your home as-is means you make absolutely no changes to it whatsoever. There are several reasons why selling as-is makes sense for someone.
No time to waste
Did you land a brand new job that’s taking you out of the area? Perhaps you came into money and nothing is standing between you and your dream house. There are plenty of reasons why people may be short on time.
If that describes you, there’s a good chance that selling your home as-is is the right decision. It’s people who need to get the maximum amount of money from their property who look to renovate. If you’re not attempting to fluff your retirement funds or move to a larger home, then skip the renovations.
If you are short on time, you can always make small efforts such as pressure washing the exterior for a deep clean.
It’s simply too expensive
Renovations don’t come cheap and if you need a renovation budget for your next property, then you aren’t going to want to use it on the home you’re leaving. That’s fair. Not everyone can afford renovations. Sometimes the difference in home value isn’t worth the time, energy, and investment. This is the same if it’s a rental property you’re thinking of renovating. Rental prices can increase significantly with a strategic renovation, but it pays to do research and not overspend. Smart investors will also find ways to reduce the amount they spend on expenses, repairs, property management and maintenance.
Of course, there are small jobs you can tackle yourself if there are certain areas of your home that drag the overall look down. A carpet deep clean, a quick coat of paint, a new sink, etc. are easy DIY jobs that can make a big difference.
Many investors are interested in purchasing homes as is so they can make the necessary investments to upscale the property. The major drawback to these types of situations is that they want a discount.
Is the discount you offer worth avoiding the time, cost, and energy associated with renovations? That’s for you to decide. Before you do, you might want to get some quotes for the tasks that could make the biggest difference to a seller.
When renovation makes the most sense?
Before you make a decision, it’s important to note that major renovations rarely provide the return on investment homeowners want. If you want to undertake major renovations, then you should save that for the home you plan to live in and enjoy for years to come.
In the meantime, small renovations can increase the value of your home and increase potential buyer interest. Certain renovations are more desirable than others. While kitchen remodels are popular, you are likely to recoup just half of the cost. Whereas upgrading your flooring can ensure you recover the project’s entire cost.
A fresh coat of paint to brighten a room should be a neutral color, if you go too daring you risk turning off a lot of buyers. Neutral is the safe bet if you want to sell quickly. Basic features tend to be incredibly popular, such as utility rooms, home office space, and a bath in a family home. Ultimately, people prefer a move-in-ready home.
So, you should think in those terms when determining a) whether to tackle any renovations before you list your home and b) which renovations will make the biggest difference to potential buyers, as well as the value of your home.
Start in your kitchen and bathroom because those are the areas that can make or break a sale. Get the basics right.