Once you’ve decided to list your investment property for sale, the first question you’re likely to ask yourself is how do I get the most value? Well I recommend that you walk through your property with your buyer’s hat on and look at it through their eyes. This will help you get a list started of which renovations you think should be done. But the question is should you fix everything on that list or sell your property “as is”?
Should You Renovate Before Selling?
Now that you’ve created a list of things that could be done to improve your home, it’s time to decide if the work that needs to be done is worth the time and money it will take. This is a dilemma that an experienced REALTOR® can help you with.
Local real estate market knowledge will be key in helping you to decide what to do and what not to do. First off, you’ll want to know if the market is hot or cold—are buyers looking for investment properties such as yours. What is the likelihood of a return on your investment? What is the condition of your home compared to other homes on the market in the price range that you would like to list for?
In most cases, fixing up a property before you list is the preferable option. A modern and well-maintained home is far more appealing to most potential buyers, meaning you’ll likely turn a higher profit and sell it quicker. However, if the property needs a LOT of work, for example electrical and heating need to be upgraded, or there are structural issues, you may want to consider simply marketing to an experienced contractor or house flipper. These types of buyers are looking for properties that require more of a “sweat equity” investment so they can make a profit once they resell. In this case, sell the property “as is” and list it just low enough to attract offers from property investment buyers.
Selling A Property “As Is”
If you’ve decided to sell your investment property without fixing it up you will need to list it clearly stating in the description that it will be sold “as is”. Make sure you price your home according to the amount of work you think is required to repair it. For example, a $50,000 structure repair should be reflected with the price being approximately that much lower than other similar properties.
Most importantly, be sure to disclose any significant issues with the property such as mold, asbestos, or water damage—these are all things that you are legally required to report to potential buyers. It is important to work with your chosen local real estate agent to ensure your listing is both transparent and commercially viable.
The Most Important Repairs to Make Before Selling a Property
If you’ve decided it’s worthwhile to make some repairs before selling, talk to your REALTOR® to have them help you identify which ones will add the most value to your listing.
Placing major structural repairs at the top of your list is a good idea since most buyers have no idea what it will cost to replace or repair a leaking roof and may pass on the home all together because they simply feel it’s too expensive or an overwhelming task. By completing these types of repairs before listing, you take the guesswork out of the equation and now your listing is more appealing to more buyers. Here is a list of repairs that should be considered as they tend to add value to an investment property:
- Repair any holes in walls and ceilings
- Replace broken appliances
- Repair the HVAC system
- Fix leaky plumbing
- Replace damaged carpet
- Bring electrical systems up to code
- Replace broken windows
- Freshen up all paint
In the case where the local real estate market is hot and it’s a seller’s market, you can usually get away with fewer repairs. But remember, a property that needs repairs will still receive a lower price in any market. Buyers may not even consider a home that needs work in slow markets. Your real estate agent will have all the market knowledge needed to understand what is best for your property and they will work with you to get the most value for your listing.