If you’re like many people who want to sell an investment property, you’re wondering whether it’s appropriate to renovate or whether you should leave things as-is. Though this is largely case-dependent – that is, it depends on your situation, your property’s location and current market conditions – you don’t usually need to renovate an investment property to sell it. However, sometimes making small upgrades can bring up your listing price. This guide explains.

Should You Renovate Your Investment Property to Sell It?

In most cases, you don’t need to renovate an investment property in order to sell it. However, you may need to make some upgrades or repairs. Your real estate agent will be able to tell you what you should do – or if you should do anything at all – to sell your investment property.

The following situations may mean it’s time to make some improvements:

  1. If your agent says it’s necessary
  2. If your property is outdated and in need of repairs
  3. If you’re selling in a buyer’s market
  4. If you’re selling a fixer-upper
  5. If you have the time and money to renovate

Note: If you’re selling in a seller’s market, you may be able to get away with making fewer repairs or upgrades. That’s because there are more buyers than there are properties available, so your investment property is likely to sell regardless. In this case, it may not make sense to put money into renovations that you may not recoup.

The following sections explain the times it may be necessary to renovate or upgrade your investment property.

Related: 5 expenses new landlords usually underestimate

Situation #1 to Renovate or Upgrade: If Your Agent Says It’s Necessary

Your real estate agent will be honest with you about whether it’s necessary to make repairs or upgrades to your investment property before selling. They’ll give you a serious assessment and let you know if it’s worth your while to make changes.

Your real estate agent knows what current market conditions are like, which means she knows what buyers are looking for. She also knows what buyers are willing to pay for properties similar to yours. Remember: An investment property is only worth what a buyer is willing to pay for it.

Situation #2 to Renovate or Upgrade: If Your Property Is Outdated and In Need of Repairs

If your investment property is outdated or needs repairs, you may have to make some changes before selling. This is especially true if your property is in a neighborhood where most of the other homes are newer.

Buyers are looking for properties that are move-in ready, so if your property needs work, it may not be appealing to them. In this case, you may need to make some repairs or upgrades before selling.

However, if you’re selling to another investor, it may make sense to hold off and let them take the reins on renovations and upgrades.

Related: Should you rent out your property to long-term tenants?

Situation #3 to Renovate or Upgrade: If You’re Selling in a Buyer’s Market

A buyer’s market is when there are more buyers than there are available properties. In this case, you may not need to do much – if anything – to your investment property before selling. However, if your property is outdated or needs repairs, it may not be appealing to buyers.

Remember: In a buyer’s market, buyers have the upper hand. They’re able to be choosy about the properties they’re interested in, so if your property isn’t in tip-top shape, you may have a hard time selling.

Situation #4 to Renovate or Upgrade: If You’re Selling a Fixer-Upper

If you’re selling a fixer-upper that you want to sell to an individual buyer who will live in it, you’ll definitely need to make some repairs and upgrades before listing it on the market. Remember: Buyers are looking for properties that are move-in ready, so if your property needs work, it may not be appealing to them.

Making repairs and upgrades will also help you get a higher price for your property. After all, the more work that needs to be done, the less attractive it is to buyers – which means you’ll be able to sell it for less.

If you’re selling to an investor, this may not be necessary.

Related: How to automate your rental property business

Situation #5 to Renovate or Upgrade: If You Have the Time and Money to Renovate

If you have the time and money to renovate your investment property, it may make sense to do so before selling. This is especially true if your property needs repairs or is outdated.

Of course, you’ll want to make sure that your renovations are in line with what buyers in your area are looking for. Otherwise, you may not see a return on your investment when you sell.

Why You Should Talk to Your Real Estate Agent Before You Renovate

You should talk to your agent before you decide to renovate your investment property just to sell it; that’s because you don’t want to spend money you don’t need to spend. If your expenditures would cut into your profits too much, it doesn’t really make sense to renovate.

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