If you own a property, there would be a point somewhere down the road when you would ask the question: Should I invest in renovating? Or am I better off selling it?

On one hand, renovating would mean improving the state of your asset but it is a big undertaking requiring significant funding. On the contrary, selling it would earn you money but it would mean losing your asset.

Here are some of the questions to ask yourself to help you make the right decision:

How are you making use of the property?

The first consideration is to assess the current serviceability of the property to you. You need to determine whether its practical value is higher than the cash.

Are you using it as a residence? Then where will you move to if ever you sell the place? Are you using it as a rental business? Then if you sell it, will you have other means of income?

How is the condition of the property?

The condition of your property will greatly affect its selling value. If your property is in a bad condition, then you cannot expect to sell it at an optimal price. However, you may be able to sell it faster.

It will be best to consult a contractor to do an assessment. This will give you a more reliable understanding of the extent of doing a renovation.

Do you have the budget to renovate?

For obvious reasons, you need to check if you have the budget to renovate. This is also one of the reasons why consulting a professional contractor is necessary. The cost will be highly dependent on the condition of the property. There may be underlying issues that would cost you a fortune to repair.

If the projected renovation expense would go beyond your capacity, then you should consider selling instead.

Do you urgently need funds?

If you are in need of immediate funds, then you would likely choose to sell the property outright. However, as mentioned in point number 2, you cannot expect to maximize pricing.

In the UK, selling your house takes an average of 2 to 3 months but this is reliant on varying factors. Some properties can take 12 months or more to get sold.

If you are not in a rush to acquire a big sum of money, then you may want to think about renovating instead and using the property as a rental. This offers a more steady source of income while allowing you to retain your asset.

Has the value appreciated since you acquired the place?

Unless there is an urgent need to sell, an investor will keep possession of a property and wait until it has appreciated before deciding to resell. Appreciation refers to the property’s gradual increase in value over time.

According to a study published earlier this year, properties in the UK have been increasing in value by an average of 9.3% per year for the past five decades. In some areas, the appreciation rate is even higher. Before selling, you should compare the current value with the original purchase value.

Check my previous article, “Where To Buy A Property – Choosing Areas With High Appreciation Rate“.

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