$20,000 is not a lot of money when it comes to real estate. That amount, while a lot of money, would not cover a downpayment on a new home and in most cases, would not even cover a downpayment on a condo. However, that amount of money does have a lot of value in one area of real estate, for the homeowner looking to sell. A property owner who wants to take advantage of the inflated home values may look to make simple but valuable upgrades to their property before putting it on the market. This is a smart and proven tactic that may not only help the property to sell, but may increase the value as well.
You should never look at putting 20k into a property as a way to raise its value 20k. Yes, you want to make your money back or even get a profit from your investment. However, the common mistake people make here is that they add the amount to the estimated value when in fact, many of the repairs made will just get the property up to the original estimated value. Therefore, the 20k did not add 20k in value to the home, it simply brought its value up to a realistic number that it was not at before.
Investing In Your Home Before Selling It
If you are able to put the time and money into your property prior to selling it, it will be a benefit to you. However, one of the common mistakes people make is that they focus on the wrong areas of the property. What are buyers going to look for when they wish to purchase the property? Should you even invest the money or just list the property to see what kind of offers you are getting?
The reality is that the market is cooling off right now a little and buyers are going to be a bit more selective now that the competition has thinned out. There are still plenty of buyers out there, but they are looking for the best possible deal. That’s where your investment can be very valuable, it can get you a fair offer for your property.
How To Utilize 20k
Keep in mind that many of the potential buyers you are going to meet with will gladly pay an extra $20,000 for the property if they know that you are putting serious work and upgrades into it. Making those upgrades, as well as covering the initial costs of them, is something most buyers cannot or do not want to handle so taking it off their plates makes the property far more appealing. Here’s where you should look to spend your budget and make improvements on the house:
- Roof: If you are going to start anywhere, the roof is the best place to start. Homeowners will ask about the roof, its condition, if there are any leaks and how long the roof is good for. If you can simplify all their inquiries by saying you literally just had a new roof installed, you will drastically increase the interest in your property.
- Lawn: If the roof is in good shape another area to focus on is the yard. Properties with beautiful and healthy lawns tend to sell faster and if you are looking at a lawn that needs a lot of work, that’s a good place to invest your budget.
- Kitchen: One of the more expensive but important rooms to upgrade in the home is the kitchen. While this budget may not cover a full renovation, it would be enough to make some drastic improvements to the cabinets, appliances and other areas of the room. Upgrades here will be noticed nearly immediately and appreciated by anyone buying the house, especially if they are completed before the property is sold.
- Bathrooms: Another important room to consider for renovations is the bathroom. Because these rooms can be outdated by decades in homes that are for sale, upgrading everything from the sink to the walls is sometimes a must. If that’s the case with your property consider investing the budget there, even if the room is still working without any issues.
- Needed repairs: You know your home better than anyone and you know the areas that need the most attention. If the house has been falling apart for years, that budget can help you to make several important repairs that will help reinforce the property’s value as well as lower any concerns a potential buyer will have. This includes leaks, plumbing issues, repair walls, replacing broken ceiling fans and so forth.
- Appliance upgrades: Replacing appliances may also be something that you can look into. How old are the washer and dryer, the dishwasher, refrigerator and any other major appliances in the home? If they are over 10 years old, the buyers may appreciate an upgrade, especially considering the warranty may be expired on the current units.
- Windows: Another area of the property that homeowners hate to handle themselves are the windows. While these can be changed out quickly, the cost and the commitment may be more than a homeowner wishes to make. Also, new windows not only increase the value of the property because you are protecting it from storms as well as keeping the home cool or warmer, depending on the preferences, but windows will also help lower the noise from outside, meaning the property becomes much more relaxed and private in the eyes of the potential buyer.
- What’s missing: Again, this is your property better than anyone and you know what it needs. Walk through your house and make a list of everything you feel needs to be replaced or fixed before listing the property.
Your realtor can also help you with this. If you are considering selling your home, meet with your realtor and talk to them about where it makes sense to invest your budget and what upgrades or repairs would be most beneficial to a buyer. Your realtor will know how to best utilize that budget and where the most important improvements can be made.