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how much to rehab old house before selling?
I inherited a house that was built in the 1960s. It never had a lot of upgrades / maintenance, other than a new bathroom in 2010.
DH & I planned to make minor repairs < $1,000 & rent the place.
Three weeks ago a pipe burst & destoyed the place. It's now been gutted to the studs, except for the 3 bedrooms, the upstairs hall & the "new" bathroom
At a minimum it will get all new interior walls, upgraded electrical system to bring it up to code, upgraded plumbing (same code issues), new kitchen with new appliances, new half bath, & all new flooring. This will cost about $20-$25k
Contractor is recommending the following expensive upgrades to make it sale ready:
Central AC $10,000
new roof $15,000
new siding: $12,000
I really don't have the cash on hand for all of this but the contractor is a friend & will let me pay for materials now & labor once I sell. I'm not crazy about that because I don't know enough about real estate to to know how long it will take to sell & close. If we're talking a few months & we close by summer, fine. Longer than that, it doesn't feel right to me.
Since the inside will be "new" what harm do I do by not making the outside pristine? I know about curb appeal but this is a huge investment. I don't want to throw away money if I won't recoup it.
As is, before the pipe burst I thought we cold sell for about $175,000 -- $200,000, which is below the comps in the area & my guess based on the age of the house. With the upgrades I've agreed to ($25k) I think we could get $250.000 for the house. To put in another $25k, I'm not sure we could get $275,000 -- $300,000 because it's just not that kind of neighborhood. As is, with all of the damage I doubt I could sell it for $75,000.
So do I put on the new roof & siding or leave that to the new owners?
Re: how much to rehab old house before selling?
In my opinion I think you should make the required changes as listed but not the additional items that your contractor suggested.
The A/C is nice to have but I think you could do without it. If the siding and roof are in very bad shape you may want to consider replacing them but it will cost a lot and what happens if you don't get the price you were hoping?
I hope that helps,
Sadie the Dog
Our Kitchen & Bath Reno Blog
My assumption is that the neighborhood comps all have AC. For homes in the $200-$300K price range, AC seems to be pretty much expected across the nation.
My vote is to definitely do AC.
If the roof leaks, or is a danger, I'd replace that too. But if it's just old, I'd leave it.
And I'd leave the siding.
Actually the comps don't have AC. For this neighborhood central air is the exception not the norm.
Since this is a national board I should also mention that houses in this price range $200k -- $300k tend to be the low end of the price range in this area. Average home in this town is about $240,000; average home price in NJ is probably closer to $500,000 & yes those do have AC .
Have you talked with a REA in this area specializing on these types of homes?
S/he may be able to provide more fact-based info rather than opinions here.
The best person to ask is a real estate agent (or two). Because this is a national board, we don't know the details of your house or the neighborhood, and most of us are not in the real estate industry, we cannot give you the most solid advice.
I can tell you that my house in NY was completely redone on the inside (taken to the studs), but besides a paint job on the siding, nothing was done to the outside. We didn't mind it because we made the house cheaper for us to afford it while living nicely inside, and we have the say in the colors and materials for something that doesn't change once it's up. We replaced the roof already (it leaked within 6 months of us buying the house), and will eventually replace the siding and fix the detached garage. So not doing the work that the contractor recommended is not necessarily out of the table (unless the rood leaks. NY state law states that the roof must not leak.)