Owners wanting to sell their property in the near future are often reluctant to then still invest time and money in repairs or renovation work. This is understandable – you’re moving out soon, after all, and won’t benefit from the improved standard of living the property will then afford. However, in terms of the profit you make on the sale of your home, carrying out certain renovation tasks before selling can certainly pay off. To put it more precisely: renovating your home is always worth it when the costs thereby incurred are less than the expected increase in value that the work will generate.
Although you should always seek an expert costing first, you can generally assume that under normal circumstances, giving your property a facelift by renovating and repairing it will pay off for you. This is true both of minor cosmetic repairs such as painting walls and replacing tiles, and of more costly measures such as repairing the heating system or renovating the roof. If you were already planning on having work done anyway, there is then often scope to improve the standard – by having real oak parquet flooring laid to replace old laminate, for example, or by installing better-quality bathroom fittings.
Flaws disproportionately affect the purchase price
More extensive renovations may cost money; however, many prospective buyers who view a property that has certain flaws will estimate the cost of the repairs to be substantially higher than they in fact are. This will then be reflected in the price they are willing to offer for the property. To many buyers, it is also important that they can move into their new home immediately after purchasing it – and that the home therefore be immediately habitable without limitations. When it comes to minor repairs or renovation work, the main factor is that all-important first impression. If your property looks well-maintained, potential buyers are more likely to want to make it their new home. This is because potential buyers genuinely interested in your property will already be imagining themselves living there when they come to view it. Even minor flaws – such as worn carpets or a few scratches on the flooring – disproportionately affect this process. This too results in the buyers trying to get a discount on the price.
Get an accurate costing to considerably increase your profit
In order to be able to estimate the cost-benefit ratio of any renovation work ahead of selling your property, you have to compare two unknowns: the cost of the required renovation work and the increase in the value of your property thereby generated. The likely cost of the renovation work can be calculated with relative accuracy, thanks to estimates from the relevant tradespeople. By comparison, the resulting increase in property value is extremely difficult for most owners to estimate. This is why getting an expert estimate is a very good idea indeed. You can thereby rule out that the renovation work will cost more than will be yielded by the actual increase in selling price. As a general rule, if you manage to upgrade your property from ‘normal’ to ‘upmarket’ with the renovation work, you can generate an increase in property value of around 15 to 20 per cent.
Would you like to find out whether renovating your property before selling it is a good choice for you? Get in touch with us! We are happy to advise you.
Legal note: This article does not constitute tax or legal advice in individual cases. Please have the facts of your specific individual case clarified by a lawyer and/or tax advisor.
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