How To Decide If You Should Sell or Renovate Your Property

Anyone owning a property for a significant amount of time is eventually confronted by one question: Am I better off selling it or should I invest in renovations? 

Determining the right answer is never the same for all, and a whole lot of things factor into the decision. Renovations, of course, will add value to your property, but selling will give you quick profits. Renovating requires substantial funding, but selling means losing an asset.  

In the end, only you as the property owner will know what’s best. But in weighing your options, we recommend taking these five things into account. 

The Property’s Usefulness 

How much do you actually need it? The practical value of a property sometimes outweighs any profit an owner can make in selling it off. Any owner needs to determine a property’s serviceability before even considering letting it go.  

If you’re currently living in it, will you be able to move into another residence in comparable comfort? If you’re renting it out, will you have another source of income?  

The Property’s Condition 

What state is it in? Is the property in such dire need of renovation? Determining this will give you an idea of how much you’d fetch by selling it, and how fast you’d be able to find a buyer. Knowing these will help make your decision more informed in the end.  

Ideally, you will want to consult with a contractor who can make an assessment of your property for you. A professional contractor can also give you an idea of how much it would cost to do a renovation.  

Your Budget 

Needless to say, any renovation will require money. Determining how much you can shoulder financially and how much you need to do a proper makeover is a must. Once you’ve got this figured out – preferably through a proper contractor – you’d be better off at telling whether a renovation is worth it, or if you should seriously consider selling instead.  

Your Financial Needs 

How urgently do you need money? If immediate funds are what you’re looking for, selling might be the choice you’re leaning towards to. Note though that getting a house sold usually takes two to three months, at least in the UK. In some cases, this can take up to a year. And if your property is not in optimal condition, you won’t be able to maximize pricing.  

If your financial needs can wait, renovating a house and renting it off might prove more profitable in the long run.  

The Property’s Value Appreciation 

According to a recent study, properties in the UK generally appreciate more than 9% annually. However, the difference in appreciation rates from area to area might vary widely. Owners will want to keep possession of a property until its value has increased significantly before considering selling them.  

In deciding whether to sell or renovate, you need to check how much your property’s value actually appreciated over the time you’ve had it in your possession. Knowing the difference between what you would get out of a sale now and your property’s original purchase value will be important in determining whether selling is worth it. 

Read our previous article ‘How To Choose Locations With High Chance of Property Value Increase’