“Tear down” vs. Renovate
Friday, August 26th, 2011One of the most common questions I am asked by potential home sellers is should I invest money and renovate my property before selling, or should I sell it as is because the new owner is going to tear it down and rebuild anyways? Well the answer of course, is it depends! The bottom line is, will the time and money you spend putting into the property be returned to you through a higher selling price? When considering this, there is a lot to take into consideration.
Here are some points to consider:
Location – if you are on a busy road or not in a very desireable neighborhood is different than being in a great community close to ameneties.
State of repair – if you only need to spend a few thousand dollars doing minor repairs, it may be more worthwhile completing as opposed to spending 10’s of thousands of dollars doing major repairs.
Time spent – if your time is very valuable (whos isnt?!) the effort and time off work consumed trying to line up contractors and materials, or doing the work yourself might cost more than the extra money you see upon sale.
Return on investment – if looking at comparable houses, we can determine you need to spend $10,000 in renovations and you are only get a sale price of $10,000 higher, it may not be worth it (although if time on market is important to you, this will reduce the number of days your house is for sale)
Taking all this into consideration, you can see that the answer to this question is going to be different in every situation. The best solution – get a proper current market analysis completed by a realtor for your house. Through this you will be able to determine what the house is worth now as is vs. how much it will be worth if you invest “x” amount of dollars. Then you can use those numbers to determine if it is worth your time.
