Sometimes Selling Fast Is Better Than A Lengthy Remodel
Every situation will be different. Certainly, there is a place for remodel, refurbishment, reappraisal, and sale. However, even if done absolutely right, sometimes a fast cash sale may be better than entirely revamping that Mediterranean wonder you once built.
The defining agent in differentiating which approach will be more profitable is going to be something called opportunity cost. What opportunities do you lose, and what do you gain, by approaching a fast cash sale through an agency in the business of buying homes? Let’s take a hypothetical example.
A Rough Estimate Of Normal Costs
Say you’ve got a property that can pull around $150k presently, and could be made worth $200k with upgrade and remodel. The cost of remodel will be, in this scenario, $25k. This could perhaps require you take out a loan. Still, you’ll double your investment—directly. But now let’s say it takes five months to get the remodel done—a figure not at all unreasonable—and another five to sell.
During that time you lose key access to necessary areas of the home, forcing you to adapt, which incurs additional expenses. You might have to go to a hotel, visit family, or eat out while contractors are working. Conversely, if you’re doing the work yourself, it’s going to be hard to do anything else.
Though your refurbishment only cost $25k directly, it had an indirect impact on your regular income. Also, a remodel can be tough on a career; one or both of you may be between jobs owing to DIY projects, or contractor complications. And even immediately effective remodel is no guarantee of immediate sale.
If the neighborhood is seeing a value spike, a long remodel period could work in your favor. If it’s in decline, it will just compound the money you lose waiting to sell. It’s very possible the opportunities you lose by focusing on a remodel could be greater than the profit you gain going that route.
Multiple Factors To Account For
Factors like remodel expense, existing income, collateral expenses, and opportunity cost will all be a big part of your decision regarding whether it would be better to properly remodel and list, or go for a cash sale. There are cash buyers out there who can immediately put money in your pocket, helping you maximize opportunity and avoid remodel efforts yielding questionable profit.
The time you save alone can be worth the diminished direct equity. For more information on cash buyers, read this post from IsoldMyHouse.com. The reality is, there are certainly situations where you’d be leaving money on the table by not remodeling the premises. However, in America’s present housing market, this isn’t something defining every property.
Take this into account, too: a cash sale is a lot easier than you may expect. Essentially, you just contact such agencies and see what they’re willing to give you for your house. An appraisal is common in such transactions, but there are quick cash buyers who don’t require appraisal.
At the end of the day, you’ll get your property sold as immediately as possible. You might be able to get everything done in a few days—as has been the theme of this writing, all situations are different.
Selling For Cash
Sometimes national trends have a greater direct impact than some local ones. All are considerable when you’re looking at a home sale. Remodeling strategically definitely has benefit. So does landscaping, and quick installs like adapting a solar array to your residence. All can be profitable if done right.
There is a direct investment and a time component, though, and these are very important to factor in. Also, don’t forget taxation. When you account for all these things together, you’ll be more adequately equipped to compel the outcome you hoped for, or thereabouts. Sometimes reality may even outshine expectations, if you’re diligent.
Homes are a big investment. You want to take time to consider all these things before making any irreversible choices. That said, there are many situations where a quick cash buy is your best option. Getting a cash sale is very straightforward; you can get it done fast if you want to.