According to experts, selling a refurbished property can increase its value by up to 65%. So is it worth renovating your home before selling it seems to be a no-brainer decision. However, not all refurbishment projects make financial sense. In this article, we will attempt to help you make an informed decision.
So you've decided to sell your house. At this stage, you probably have lots of questions going through your head. How fast do I want to sell? Should you renovate your home before selling it to increase its value and sell it sooner? Is it worth spending the time and money on it? If so, how much? Ideally, you want to sell your house for more than what you paid for. But on occasions, certain renovations will not necessarily raise the value of your home enough to break even, so you need to go for the right upgrades.
Although real estate market prices are not an exact science. In most cases, it is worth renovating a house before selling or renting it is usually a very profitable exercise. Keep in mind that, when you renovate your home before selling it, you must add equity value to the home in order to sell it for a higher price, so you have to be clear about what your future buyers will value positively.
Depending on where the property is located, it will make more or less sense to renovate your home before selling it. If you live in a booming real estate market like the city of Malaga, it makes sense to stand out. Especially if your property is located in the historic center. There is nothing more attractive than a freshly refurbished property in a historic building, mixing modern and tradition. If you have a look on local real estate portals (e.g. Idealista or Fotocasa), you can quickly establish how long a similar property has been listed for.
This should give you an idea if the market is currently "hot" or "sleepy". It will also help you make a decision on the need to renovate your home before selling it and help you set your price accordingly. You will often see on these sites properties that have been completed remodeled in otherwise not necessarily trendy parts of town and can appreciate how the resale prices jump after being refurbished. As a matter of fact, many companies speciliaze in buying average apartments, renovate and resale them immediately making a huge profit in the process.
Let's face it, as much as you'd like to think that you are in control of the situation, it is worth spending a bit of time to find the right professionals to assist you in your endeavor. Not only will these experts be able to give you an estimate of your property as it is. They will also have an idea of how much it would cost you to carry out a refurbishment, and how much value it could add to your property.
These property consultants and interior design experts will be able to pinpoint which specific areas of your home have the most potential to increase your return-on-investment. Is it a just a question of knocking a few walls down to get more light and make the place look bigger? Or is it better to renovate the kitchen or the bathroom?Professionals are professionals for a reason: they know their stuff. Some real estate consultants, like Ola South, specialize precisely in upgrading properties to make them more attractive. Either to sell them or to rent them out. We are here to tell you what needs to be done to sell it quickly and increase your profit.
There are usually two types of buyers: people who are looking for a move-in ready home or investors who are looking at buying a "fixer-upper" to resell it at a higher price.
In the immense majority of cases, buyers are not really interested in undertaking major renovations after having spent a substantial amount of money on the purchase itself. It is therefore safe to say, that most are looking for a move-in ready property, meaning that the more attractive your property looks, the sooner it will be sold and at a higher price.
If you are currenlty living in the property or renting it out, think about how long you wish to spend on the improvement works. If your plan is to live in the property for another few months, start by renovating areas that are always a major selling point (e.g. kitchen or bathroom)
As they say, money is what makes the world goes round. How much can you afford to spend? Does it make financial sense to spend more money if you are looking at selling your property right away? Will you just cover your costs or actually make a profit from it?
Most people use this very simple rule to try and calculate their return-on-investment:
After repair value = property's current value + value of renovations
So if my property is currently worth 100.000€ and I spend 30.000€ on repair work, the after-repair value of my property equals 130.000€. This is not always the case. In many instances, how a remodeling project is perceived to be worth depends on a lot more than just the exact amount you spend on it.It is important to establish first what you will be working on and if it is worth renovating a house before selling.
Changing your bathtub might not necessarily add any value to your home at the time of resale, but breaking a wall down might completely change its perceived value. You should again speak to professionals, mainly Interior Designers, who can help you make the right calls. From experience, we have often seen refurbished homes multiply their resale value way beyond the amount spent on refurbishments. You just need to figure out what will increase its value most.
There are a few basic tips to know if it is worth renovating a house before selling it that almost never fail. On the one hand, you can go for what is known as a "facelift", that is, fix small damage or paint it; alternatively, you might need to carry out a comprehensive reform. The latter, according to data from professionals can represent an outlay of between 300€ and 800€ per square meter.
Therefore, if we completely reform an 80m2 home, we will spend, on average, about 44,000€; however, we will be able to increase its resale price by 65%. That is to say, if before the reform it cost 200,000€, we will now be able to sell it for 330,000€. Again, this depends on the actual construction work you will be carrying out and the perceived value from potential buyers.
According to the analysis of different real estate experts, a renovated home can increase its value between 20% and 65%. And it is that, despite the investment necessary to upgrade the apartment, this option is very interesting for placing the property in a better situation for sale.
Some aspects why it is worth renovating a house before selling:
Kitchen and bathroom renovation: these two areas of a house always come up a the top on the list. Buyers look for kitchens and bathrooms that are in good conditions and spacious. Upgrading them can give a boost to the sale price. The price of renovating the kitchen is usually around 1,500 euros per square meter, but it will greatly increase the value of the sale price.
Add new flooring: changing your old floor to a floating wooden floor will completely change the aspect of your property. This is usually a pretty cheap improvement that will give your property a completely different feel. You can see some "before/after" examples on different projects here. For instance, you can view on this particular project, what a correct upgrade can do to your home.
Repaint: in southern Spain, you will often find textured walls that were so commonly used in the 1970's. Time to call a painter and give your walls a facelift! A plain, white wall can often make wonders in the overall aspect of your home.Brightness of the property. In this case, there is little you can do if your home is not bright. But you can try to enhance natural light by incorporating light colors on the walls to give a greater sense of light, for example. Again, in this project, you can see how an otherwise dark property can gain brightness.
Energy efficiency. Increasingly, buyers look at the energy rating of the property when purchasing a home. In times of energy crisis, a buyer will value windows and doors that will help them save on energy costs. Especially in areas like Malaga where the heat can be pretty intense during the summer months. You can not only add insulation to your home but also replace old appliances for more efficient ones. You can market these updates by presenting Energy Star certification. This is now required in most of Europe when advertising a property for sale.
Technologies that make life easier (home automation). Electric blinds, climate control, lighting… We live in an era of technology, let's use it to add value to our home.
Large and tidy bathrooms. As in the case of the kitchen, having modern and spacious bathrooms will help you earn bonus points when selling your home at a higher price.
If you need help from a professional, you should know that there are specialists who can advise you to sell your home at a higher price through the so-called "home-staging" techniques.Homestaging creates diaphanous, organized, comfortable, clean, tidy, fresh, well-lit spaces with a pleasant atmosphere. Studies show the potential buyers decide as soon as the visit begins (within the first 90 seconds) when home staging techniques have been used. The objective is to set the scene so that the house can convey the desired sensation, making the client see the possibilities of the property.
In Spain, if you carry out a major reform, rehabilitation, extension or any new construction in your home, it may be a good idea (and at times it is required) to register them at the local Land Registry office (Registro de la Propiedad), for which it will be necessary to present a "cadastral declaration", in which the alterations produced in the property are specified. This is important in case you knock walls down or change the original arquitectural structure of your property. In order not to leave any loose ends, it is always best to go to a professional expert who can assist in the correct presentation of all the necessary documents.
Best practice on how renovate your home before selling it? Ask the experts at Ola South!