Renovating to sell is an entirely different concept when compared to doing it on your own terms – but is it really worth it, and what are the key differences?
Regardless of our reasons, it’s only natural to want the highest possible price when it comes to selling our assets, and that includes property. However, this often requires careful forethought on behalf of the homeowners as to how to get there, and one of the more popular tactics is renovating to sell.
By definition, to renovate is to refresh, reinvigorate or restore. Therefore, the spectrum is huge when it comes to applying this term to property, and can include anything and everything from a fresh coat of paint to a brand new kitchen. While how far you choose to go down the rabbit hole is entirely up to you, is it really worth it or can homeowners just flip their house “as is”?
When You Should Be Renovating To Sell
Even the briefest of glances at the Victorian property market – or nation wide, depending on who you ask – would show that we’re very much living in a seller’s market. For a variety of reasons, what this translates to in simple terms is too many buyers, and not enough properties.
Home owners usually undertake renovations in the hope of increasing the value of their property, or to present the home in question in the best possible light to potential buyers. However, with the market current tipped in the favour of sellers, sellers may not necessarily have to put in the same effort as they once did just a few short years ago.
On the flip side, renovating to sell in the current economic climate still goes a long way when it comes to improving the appeal of the property, and can shift the sale figure higher than initially anticipated – which of course, is the end goal for any seller. However, if you’re thinking about renovating to sell, there are a few relatively simple questions to float before you start ripping out walls to determine if the task’s true cost is worth it or not.
Local Market Conditions – When determining the need for renovating to sell, it’s best to first take a look at the individual conditions of your local real estate market. Have an in-depth look at the competition – what are similar properties selling for, what features do the higher value homes have, and how long are they sitting on the market for? Before you start renovating to sell, have a chat with a reputable property adviser to determine how much or how little you need to do.
Makeover vs Renovation – Selling your home “as is” won’t stop buyers from trying to negotiate, but nor will a brand new bathroom. Once you’ve assessed the market conditions in your area, it’s time to determine whether your property needs some simple cosmetic tweaks, or if there is anything structural that needs attention prior to a potential sale. If you opt for a makeover as opposed to a full scale renovation, your “curb appeal” lifts as opposed to perceived value.
Time Is A Currency – While many Australians are passionate about the fine art of “doing it themselves” (or DIY projects), be sure not to underestimate the true cost of renovating to sell if you intend on tackling it yourself. If you already have limited time, a low capacity for stress, or need to sell your home or property by a certain date, then tackling a home renovation on your own without professional trades may not be the best idea.
Over Capitalisation – If you have spent $200, 000 on renovating to sell, but only made a $100, 000 profit on the bottom line, then this process is what we refer to as over capitalisation – or the least favourable outcome of renovating to sell. Instead, experts indicate that you should allow 10% of your property value for your renovation budgets. An example of this is if your home is valued at $700, 000, your renovation budget should be $70, 000.
Needless to say that just about all potential buyers will be seeking a bargain. To some, freshly renovated properties can be a real turn-off, as they may feel like the home is being presented in search of maximum profit. Instead, they will look for “underdog” properties that are more in line with their budget expectations. 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 ageing home just as it is could end up netting you a better sale – which is why it’s always important to speak to the experts before you get started.
Sourcing Advice On Renovating To Sell
A completely free service, Emergency Services Property Advisors provide property advisor services to Police, Fire, Ambulance and S.E.S personnel and their families right across Victoria.
Luke and the team at ESPA are passionate about providing support to some of Australia’s most valued public servants, and aim to provide tangible real estate advice. Along with key industry insights, ESPA also works with a broad range of service providers linked to the real estate industry such as conveyancers, trades, legal practitioners and mortgage brokers.
If you are an emergency services worker looking to potentially buy or sell property in the future, please get in touch with Emergency Services Property Advisors today to discuss how we can turn your real estate dreams into reality, or call Luke directly on 0414 757 705.
