If you own a property that needs major repairs or has unfulfilled potential, is it worth investing the time and money to renovate it before selling? Will you sell more quickly and achieve a better price?
The dilemma. Spend too much on home improvements and you risk losing out if the sale price isn’t high enough to cover your expenditure. Sidestep renovation works altogether and it could take months or even years to find a buyer who is willing and able to undertake the repairs. Which option is right for you?
How Much Do Home Improvements Increase Value?
The short answer is, it depends.
Some improvements add more value than others. A recent survey of British homeowners found that a new kitchen is the improvement most homeowners are keen to make, closely followed by a garden makeover and a new bathroom. But how does this compare to what buyers want and what they’re willing to pay more for?
Since the first COVID-induced lockdown ended in May 2020, estate agents reported a change in buying trends. People are less focussed on kitchens and more interested in gardens and the amount of indoor space. Home offices — or the possibility to create one — are proving increasingly popular. Tapping into these trends by prioritising home improvements that give buyers what they’re looking for could be the best way to add value to your home.
There are also regional variations when it comes to which renovation projects will have the most impact on the price achieved for your home. In London, where space is at a premium, converting your cellar to create an extra living or storage space could add up to 30% to the sale price. Buyers in the capital are also willing to pay more for open-plan living — according to recent research, removing an internal wall to create an open-plan kitchen/diner can boost the value of a property by as much as £48,417. Whereas in Dorset, adding decking and lighting to the garden could help to attract more offers and add as much as £8,946.
To make sure that the cost of improvements is covered by the sale and make a profit, focus on low-cost projects that will deliver a high return on investment (ROI).
It’s a good idea to talk to your estate agent and other property professionals before investing time and money in major renovation works. They will be able to tell you which alterations are most likely to add value to your home and provide a healthy ROI. You should also consider your personal situation and objectives in selling the house. If you work round the clock and have a bust family home with small children running around, is it practical to rip down walls or live without a bathroom for weeks? If a quick house sale is your priority — whether that’s due to a separation or the need to relocate for a new job — undertaking a six-month-long renovation project before you even put the house on the market is not the right option for you, even if it might boost the property’s value slightly.
Will Anyone Buy a Property That Needs Major Work Done?
If you lack the time, budget or inclination to undertake major renovation work on a property you plan to sell, how do you find a buyer who will offer on the house as-is?
Buyers who are on a limited budget — first-time buyers or homeowners looking to upsize or move into a more expensive area are often extremely interested in “fixer-upper” properties because of the potential to buy low and add value by making improvements. Often, a property requiring work is the only option for this type of buyer because a “walk-straight-in” home is beyond their budget.
However, even within this reduced pool of potential buyers, the number of people who are really in the market for a major renovation project is smaller still. Many people will tell the estate agent that they are in the market for a fixer-upper, when in reality, they are only prepared to undertake cosmetic improvements and minor repairs. Also, be aware that bargain hunters will be keen to knock you down on price to keep some of their savings in reserve for the renovations required.
Alternatives to budget buyers include house buying companies and property developers. The former, also known as “quick house sale companies” have the funds to buy your property for cash, regardless of its condition. Their offer will be slightly below market value — they make their money by selling the house on — but you won’t have any estate agents or solicitors fees to pay and the sale could go through in as little as seven days.
Property developers, much like bargain home hunters, will be extremely interested in your house because of the potential to add value. Many developers make their income by “flipping” properties, that is, buying a fixer-upper cheaply, making improvements and selling it on for a profit. Be prepared for some fierce negotiations though — the developer will want to buy your home for as little as possible to maximise their ROI.
To Renovate or Not to Renovate?
You must weigh up the pros and cons of each option, taking into consideration your property and personal circumstances. The following questions might help you decide on which route to take:
- How much work is essential to make the property habitable and/or safe?
- Are there any improvements that will add value to the property?
- Which property features are most popular in your location?
- How much budget do you have for repairs?
- Can you undertake any or all of the work yourself?
- Do you have the time to undertake the work?
- Can you live with the disruption of ongoing renovations?
- Do you need to move in a hurry?
- What are the prospects for selling the property in its current condition?
- Are you willing to compromise on the price for a fast, hassle-free sale?
Adding space and reducing clutter is important, if you are no good at DIY or carpentry it’s often worth bring in a professional such as custom cabinets Dallas to sort out all that storage.
An aspect of renovation which is often overlooked is the security of the property. Are the old locks up to current British Standards and do those window locks still work.
It is worth considering a security upgrade before you start renovating the rest of the property. The expensive tools, building supplies and other materials may be of particular interest to burglars.
Whether you’re out in the country or looking for a Barnsley locksmith, Doncaster locksmith or Rotherham locksmith. A security upgrade is definitely worth considering.
Renovating a property is a major undertaking. It will consume a considerable amount of your time, energy and money. Done right, home improvements can add thousands to the sale price of a property. But beware of investing heavily in alterations that will not add any value to your home. If in doubt, speak to property professionals for advice.
