Refurbishing a property before selling?

Properties that are renovated or refurbished before they are sold may achieve higher values when they are sold. But is it really worth the effort to renovate?

Once owners have made the decision to sell a property, the question often arises as to whether it is worth renovating or even refurbishing it before the sale in order to achieve a better selling price.

In fact, the purchase price levels for renovated and unrenovated properties have changed considerably. Particularly when it comes to the energy efficiency of the building, the price differences are sometimes very large.

When it comes to renovations and refurbishments, professionals distinguish between fundamental work and measures that are primarily aimed at maintenance or embellishment.

What is the difference between decorative renovation work and refurbishment work?

Painting the walls, fresh wallpaper or replacing the floor are considered "decorative renovations". These are mainly cosmetic repairs, which are not a priority for maintaining the building, but improve the first impression. Properties in a well-kept condition appear more valuable to potential buyers and are less likely to be renegotiated in terms of price. Decorative renovations are limited in price but can make a difference to the sale price in the end.

The situation is different for genuine defects or wear and tear, which can sometimes significantly reduce the quality of living. These include replacing the heating or thermal insulation. If extensive renovation work has to be carried out first, this can put off buyers who want to move in as quickly as possible. Financing banks are also increasingly paying attention to the condition of the heating systems and impose more equity capital on buyers or even requirements to replace the heating.

On the other hand, owners must ensure that such renovation and refurbishment costs remain profitable. If the renovation is not worthwhile, a quality estate agent will point out an outdated or inefficient heating system to prospective buyers before the viewing and take any price reductions into account when setting the asking price.

Simple, normal and upscale equipment

The floor coverings are missing or worn with simple furnishings. The kitchen and bathroom are not tiled, are in poor condition and there is no central heating. Normal fixtures and fittings, on the other hand, allow you to move into the property immediately without having to meet modern living standards. To give you a rough idea, it can be said that properties with upmarket fixtures and fittings increase in value by around 15 to 20 percent, while basic fixtures and fittings reduce the price by around 15 percent.

Is it even worth refurbishing and investing large sums of money?

Refurbishment or renovation is always worthwhile if the increase in value of a property is higher than the costs incurred. Simple improvement work is worthwhile in most cases. In the case of properties with simple furnishings, it is often impossible to find prospective buyers or the property falls into the hands of bargain hunters. Buyers also often estimate refurbishment costs to be higher than they actually are and are reluctant to pay too high a price.

The basis for any project should always be an exact calculation of the costs. It is worth asking your local estate agent about this. This is because an expert can estimate whether the project is worthwhile even before the renovation. This minimizes the risk of investing money in the renovation that cannot be recouped through a sale in the end.

Would you like to sell your property and are considering renovating or refurbishing it before selling? Let us advise you!

Notes

For reasons of better readability, the generic masculine is used in this text. Female and other gender identities are explicitly included where this is necessary for the statement.

Legal notice: This article does not constitute tax or legal advice in individual cases. Please consult a lawyer and/or tax advisor to clarify the facts of your specific individual case.

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