If you’re thinking about selling your property, you’re probably wondering if any investments are needed to help make it more conducive to a profitable sale. That is, you are probably trying to work out how much more you should spend in order to increase the sale price. Because every property is different, some homeowners will need to spend money on their property to make a sale, while others won’t. This depends not only on your property’s current condition, but on the condition of your local real estate market as well. There are many different methods that can be used to spruce up a property before putting it on the market. These could range from a basic clean-up job to a full renovation.
The deciding factor should be the return on investment, or ROI. The cost of improving your house before selling needs to result in a sale price that is higher than what you put in, but this can be very tricky to gauge. A good real estate agent will be able to help you go through these different levels of investment, to determine what will be most effective in your particular situation. It helps to have an agent on your side who is well versed with your local competition and the state of the market in general. If you are going to spend money on your home, it’s vital to ensure that this money is going to be put to good use and result in a higher profit at the point of sale.
Improving your ROI with Renovations
The return on investment will depend on several factors. One way to make a great ROI without starting a major renovation is by giving your property a top-to-bottom makeover. This could include rearranging furniture and decorations, purchasing new accessories, repairing minor flaws and cleaning the home thoroughly. Those who do have the cash for a larger scale renovation will want to think carefully about what to commit to and how much to budget before getting started.
In many cases, a newly renovated home will receive a higher value or price on the market, but remember that this is not always the case. Before you start knocking down walls, be careful that your renovations are designed to draw in a wider range of buyers rather than limiting your potential market. This will depend in part on the other homes in your area. If your property is already considered to be priced at the higher end of similar homes in the neighbourhood, new renovations will push it out of the affordable price bracket for many potential buyers. This could lead to the home sitting on the market for a longer time period before a buyer who can afford it is found.
The Role of Local Market Conditions
A major factor that needs to be taken into consideration is the condition of your local real estate market. This is why it’s important to choose a local real estate agent who not only has experience with selling homes in general, but in your suburb specifically. Homes in your neighbourhood that fall into the same price range should be the standard by which you hold up your own home. If these homes have features and amenities that yours doesn’t; this could indicate the need for renovation.
In addition to consulting with a real estate agent to compare homes in the area, you should start visiting local auctions and house inspections to get an idea of the type of buyers who will be interested in purchasing your home. Find out what income bracket they fall into and use this demographic information to help you determine if renovating your home will set it ahead of the crowd or make it undesirable. The ideal is to keep your home in an affordable price range while giving it the features that will make it stand out from the crowd. This will give you the strongest return on your investment.
The Cost of Renovations
Renovations will take both time and money to come to fruition. You’ll need to weigh these costs carefully to determine if renovating is a good idea in your situation. Even if you budget for renovations; it’s important to note that more often than not, costs run higher than what you may have initially anticipated. It’s a good idea to give yourself a cushion to help soften this additional expense. Think carefully if these resulting changes to your home will justify the cash you are spending to have them completed – in many cases, renovations simply aren’t worth the price.
Remember that selling your house is already likely to cost you a fair amount. Things like spending money on the moving process after you have sold your home are aspects of the home-selling process that many people forget to plan for. You’ll have to put down a deposit on your next property as well. Because ROI is never concrete or guaranteed, if you don’t have a particularly large nest egg, ask yourself if you can really afford to invest in renovations.
Those in a hurry to move may not have the time to renovate their home. If you need to move quickly (in order to settle your child into a new school or start a new job) renovations may not be right for you. They take time. Rushing a job can lead to an unsatisfactory outcome which is not worth the money. Cutting corners is risky, because often your buyers will notice and you won’t make the money back in the sale. Don’t think about renovating unless you have ample time and money to do so or the ROI will not be high enough to justify the work being carried out. Selling and moving house is already stressful enough, so if you are rushing to complete a renovation before you move it may not be worth the trouble.
Because professional renovations cost time and money, many property owners choose to renovate their own homes. The Do-It-Yourself culture is quite popular in Australia, with numerous television programmes dedicated to the practice of D-I-Y home renovation. There are free renovations classes offered by hardware shops and many online resources to help you get started. It’s tempting to jump on the D-I-Y bandwagon to renovate your own home before selling as it could potentially yield a larger profit. But D-I-Y is often harder than it looks and buyers will be looking at every detail of the house including those little mistakes you made or the unprofessional finishes.
Although there are many small repair jobs in the home or yard that can be accomplished easily by amateurs, more expertise is needed for larger renovations. If a D-I-Y job goes awry, you’ll have wasted time and still need to pay a professional to fix the problem.
To freshen up your property and make it look its best on a limited budget, a full home makeover is often the best option. This can be accomplished with very little money and usually results in a high ROI. Many of the, Ten tips to increase property value before selling a home are reasonably cheap and simple.
Don’t be afraid to paint your home’s interior walls. This is one way to create a professional look without having to hire a professional. If you do choose to paint your home, use neutral tones, such as beige and off-white, to create a clean, cool look. For a fresh and modern atmosphere, you can also rent brand new furniture for use during just the inspection period or auction. Your real estate agent will probably have professional furniture hire and home staging connections.
Planning Ahead with Real Estate Agents
To avoid spending massive amounts of time, energy, and money on unnecessary home renovations, be sure to discuss your plans with a real estate agent. This will help you maximise your ROI. Whether you are thinking of professional or D-I-Y renovations, your agent will know what will work the best for you and whether these repairs are necessary in the first place, given the state of the local market.
All potential buyers will be seeking out a bargain. To some, freshly renovated properties can be a real turn-off because they will feel like the home is being presented in search of maximum profit. They will look for underdog properties instead that fit their budgets. Some buyers will even specifically be in search of properties that they can renovate on their own, ruling out any homes that have already been renovated. Ironically, leaving your aging home just as it is could end up netting you a better sale.