What Renovating May Do To the Sale of My Investment Property

September 20, 2011

Renovate to Sell

Should I renovate my property investment before selling-this question bothers most owners of property wishing to sell it. When a property is bought for investment purposes, its condition is not a big concern since appreciation of its long term value is the primary consideration. Over time, when its value has escalated enough to be considered ready for sale, owners scrutinize the property to find ways and means of getting the maximum price for it. It is at this time that the thought of renovation enters, and whether the amount of effort and money spent on renovation will yield a substantially higher price, to make it worthwhile.

Renovation is wide ranging as well, since it is used to define a mere fresh coat of paint as well as remodeling, redesigning and replacement of gadgets, devices and fixtures. However, renovation for the purpose of selling may be more cosmetic than foundational. This will involve repainting the exterior to add to its instant appeal, renovating the kitchen and the bathrooms-which are now considered the deciding factors when people opt to buy a house, and also repairing any damaged areas.

Reasons why I should renovate

The case for renovation is strong since it has proved to be beneficial to hundreds of sellers for the following reasons:

  • Helps to bring out the best in a property
  • The best way to upgrade a property
  • Reveals the property to be ready to move in-that is, in a livable condition
  • Scores higher over other properties available in the market
  • Meets the general buyer requirements of a property in good condition
  • Is attractive to most buyers with only customization required for families with children etc
  • Helps to get multiple offers from interested buyers and the best offer can be selected
  • More than one buyer makes the price go up since the demand here is higher, making it a sellers choice
  • Buyers will not ask for a “knock down” on price, since there are no grounds for it.

In light of these convincing arguments, reasons not to renovate are less convincing beyond the fact that it means additional expense and effort. Renovations are tedious and stressful and this proves to be a deterrent even though it brings down the price of the property since buyer will ask for a knock down on price. Besides renovations often need to be personalized according to residents’ tastes and requirements, and the renovation done by the property investment seller, may prove to be quite different.

The question of whether a property investment should be renovated can be resolved on the basis of a few factors:

  • The present condition of the property-is it absolutely run down or in reasonably good condition
  • The financial health of the owner-does he have money to spend on renovation
  • The time at hand-this includes the market situation, whether property prices are at their peak, or are likely to escalate further
  • Whether any buyers are available at present-it would not make sense to give up a genuine buyer and start renovating, and not find another buyer.

Keeping in mind all these issues, the decision about whether to renovate an investment property can be taken.

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