It’s time to sell your home — but what about your outdated kitchen and unfinished basement? If you’re reluctant to list your property before you make a few fixes, you’re not alone. Americans spend more than $400 billion on residential improvements annually. However, you might want to think twice before you jump into a demolition.
These changes can sometimes do more harm than good, especially when you don’t think about the potential return on investment (ROI). Therefore, you need to consider your next steps carefully. Here’s everything you need to know.
Reasons to Sell Your House “As Is”
First, you need to consider whether you can feasibly sell your home in as-is condition. There are a few reasons that make renovations pointless. Take a look at some scenarios in which you shouldn’t bother with updates.
You Can’t Afford to Make Updates
Clearly, you don’t want to spend money you don’t have. If you aren’t able to foot the bill for new windows or floors, you shouldn’t agree to take on that project. Instead, you should redirect whatever cash you can reasonably set aside toward minor fixes like new paint.
It’s also smart to think about your real estate agent’s recommendations. Research about comparable properties might tell them they can get $300,000 for your house without updates — and $320,000 with them. Those extra thousands might require you to spend a certain amount you don’t have or want to pay.
You Have to Move Quickly
There are moments when sellers have to list their properties fast. This situation usually happens when they need to move for a job. If you don’t have several weeks to complete a renovation because you need to prepare for your new position, you should just make smaller repairs. Time can be an essential factor.
Your Property Requires Extensive Work
How much work does your property need? If you need to install a new roof, fix the electrical system, and repair the plumbing set up, you might just want to sell. These modifications require immense effort — not to mention a substantial budget. It could be best to start at a low price so someone like a flipper can take the home off your hands.
Variables to Consider Before You Remodel
However, you may be prepared to jump into a remodel. That’s when you need to analyze a few variables.
It’s critical to consider components that may affect your plans, like comparable properties and the potential ROI. For example, you need to know current market conditions — or whether the market is more advantageous for buyers or sellers.
It’s always smart to get a handle on your finances before you start a project. Did you know that, in some cases, you can fund your renovation with a mortgage or a loan? There are a few specific options for residential remodels, like the FHA 203(k).
If you know for sure your project will have a high ROI, but you don’t have the cash, you could borrow money as an investment.
Where Homeowners Should Start
Everyone who’s ever sold a house knows you need to follow several steps before you can sign on the dotted line. There’s usually a point in the process where you must tell potential buyers about property damage — and you should fix them before that moment comes.
Be sure to list whatever you want to potentially fix. These selections should be everything that’s broken and worn in your home. There’s a difference between chipped paint and leaky pipes, so you might want to rank updates by severity. Then, you can create a section for more cosmetic repairs, like new countertops.
Therefore, as soon as you know your plans, you can begin. If you want to hire a contractor to help, try to draw up a contract with whichever professional you decide on. This step will smooth out any details and begin the project sooner. It’s always best to have a strong relationship with your contractor so you finish on time and within budget.
Best Remodels for a High ROI
Now that you have your list, you can determine which projects will make the most sense for a significant ROI.
Keep in mind that remodels need to align with trends, too. Though you may love a wallpapered kitchen, you should note that most buyers may not share your tastes. It’s best to pay attention to both current data and styles to get the biggest bang for your buck.
Minor Bathroom Project
If you want to take on a smaller remodel, you should try a minor bathroom update — which can recoup costs at around 64% for specific improvements. It’s smart to make changes like adding grout, replacing tiles, and reglazing bathtubs. These ideas only cost a few hundred dollars, and buyers want to see clean, freshly-updated bathrooms.
There’s nothing like curb appeal to draw in customers. This project will brighten up your home’s appearance so buyers actually want to venture past the front door. Tricks like repainting the front door, adding plants and flowerbeds, and setting out patio furniture should be beneficial.
Minor Kitchen Project
This remodel can be a bit tricky, especially because kitchens can be money pits. It’s important to pay attention to your plans so you make the best choices along the way. There’s no reason to gut the entire space when you can simply make cosmetic changes. If you update the countertops and repaint the cabinets, your kitchen should feel bright and modern.
Remodels Can Be Smart Investments in Certain Situations
There is no denying renovations can be challenging. It can be hard to judge where you should put your money — or whether you should spend that cash at all. However, sellers need to consider that some projects can make their home more attractive, which makes a difference because you can close the sale quickly.
While you might not make much more money than you put into the renovation, you could end up with more interested buyers. This advantage can be crucial. It’s truly up to your individual situation whether a renovation makes sense for your home.