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Fix up to sell or sell as is?

I have a 2 bedroom in need of remodeling.  The remodeling could be extensive. I feel that if I remodel it, I should hold onto it for a while and rent it.  Otherwise, I should sell it as is and go for the cash.  What's better in today's market?
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October 15 2013 - Lake View East
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Answers (23)

Speak with a realtor to help gauge the current market for your property.  If you are going to begin the undertaking of remodeling, you need to make sure you don't over improve or under improve the property for the area.  Some remodeling looks great for getting a renter but is not attractive to a new home buyer.  

If you are improving to rent you can typically "design on a dime" to get someone in but if it is to sell then the additional detail you put in should help set your property apart from the others in the area. 

Good Luck and if you need any other assistance please let me know.

Best-
Tom
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December 05 2013
Great question.  The local market will dictate which might be best for your particular circumstances. 
If you do not need to sell, and also have the extra have money to invest in fixing it up, realize that there is also the hidden expenses related to the renovation - your time, your inconvenience, and the "cost of money", as well as the cost of Professionals you may hire to help with the proces (Architect, engineer, interior designer).

If you want to get out and move on, you may be better off cashing out and let the new owners spend their time and money doing the renovations.

Also, in may towns, Building Permits, electrical permits or other approvals (Such as a Condo or Co-op Board) and the related inspections are required to do extensive work.   You should always check, as you'd not want to be in a situation where you are in violation.

Another piece of advice - if you attempt any work yourself, please be sure all your sub-contractors are insured!
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December 01 2013
Sometimes you can fix up the property on a dime and have it be attractive to renters, but not buyers.

However, the market is hot right now, especially in Chicago. Nobody knows what the market will be like in a couple of years so if you can use the cash, it is time to sell.

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November 30 2013
Have an experienced agent come by and take a look a the unit. Some updates are good for resale but if they are a necessity. But many times buyers come in and do their own updates. You want to get top dollar so have this mindset when it comes to remodeling.
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November 11 2013
I work with a lot of buyers.  It is a good market to sell in right now, but if you do no work you will be giving it away.  If you like the numbers a one-year CMA gives you for like properties, I say sell.  Fix what's broken, don't replace no matter how old.  Invest in a professional painter who can smooth and fix.  Make the paint light in color and neutral.  These are things you will need to do even if you keep it and rent it out.  Price it according to the CMA which your agent should be able to provide.  Oh, contact me if you need an agent to lease or sell your unit, a professional painter, or a handyman.
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November 08 2013
Good question....

It really depends on the area/local market the property is located in and your numbers.....

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November 06 2013
Think about how much time and planning is involved in addition to the "hard cost" of the remodel. Also, Murphy's Law, if you put in black carpet, the potential buyer prefers white carpet.
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November 05 2013
It really depends on your numbers and the local market where the property is located in. Knowing that will answer your question.
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November 05 2013
It would depend on the location, age of property and how large your 2 bedroom is
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November 05 2013
I recommend seeking assistance from a professional in your area. Consider the following:

What if you remodel it in your taste and homeowners are not attracted to it? (not saying you have bad taste, just saying!)

What if you spend more than its really worth? 


It really matters on how bad it is now. If you can spend 10k and do TLC, i think that can turn it into 25k bonus for you, if its done right. however, its all on the hype and how aggressive buyers are in your market. 
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November 04 2013
Reach out to a good Realtor and have them run comps on what a similar remodeled unit is selling for and what it would cost to remodel the unit. IF the costs dont make sense the sell it as-is.
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October 22 2013
I am not only a realtor but I've been flipping homes for the past ten years. I also have a few rentals. Here's my two cents: 1. First things first, find a local realtor. Have them run comps for all three of the options...rent it out as is, sell it as is, or sell it rehabbed. I'm licensed in Pennsylvania but I have contacts in Illinois, Colorado, Texas, & California if you need help finding someone reputable. You should try to find an agent that understands the cost of rehabbing in your area. I've rehabbed homes in CA & PA, very different costs. 2. Do not rehab the property if you intend to rent it out. I don't care how great your tenants are, they will not take care of the unit. Clean it up with a fresh coat of paint & maybe carpet, make it neat, and rent it out. 3. If you choose to rehab and sell, make sure you get the most bang for your buck. Look at the comps that have recently sold in the building & see what exactly buyers are looking for in that particular area. Look at the properties that have sold in the least amount of days and pinpoint why they sold so quickly. A good Realtor should be able to do this for you. Did the property have hardwoods throughout, did it have the most fabulous kitchen with marble countertops and a Wolf range, etc. Emulate That property to the best of your ability (within a budget you can handle). Your goal when flipping a property is to make the most money in the least amount of time. It never ceases to amaze me when flippers/rehabbers cheap out and put in the cheapest fixtures and finishes and then end up sitting on the property for 9 months paying the mortgage! There is a possibility that you don't have a mortgage on the property and if that's the case you can afford to sit on it. 4. Figure out your return on investment. That means gathering contractors and getting quotes for everything....electricians, plumbers, painters, etc. Add 10% as a buffer and then don't forget to factor in the time you'll spend dealing with it
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October 16 2013
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Hi There,

    A CMA  in the area would be first thing what i would do! Depending on this you can decide if is worth to rehab and sell it with top money or just sell it as is now!
    Call me and i can give you my opinion if you would like!

Sincerely,

Daniel Mirea
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October 16 2013
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A lot of good input out there. Some of you said that it's hard to give a definite answer without knowing the specifics.  So true!  So here are some specifics:

1) The building is in a good location near restaurants and stores, with public transportation available literally by the front door.
2) The building itself is a 27 story high-rise and is over 40 years old.
3) The previous owner was my mother who lived there for about 26 years.
4) That being said, the appliances are old and sinks and tubs are worn with sticky faucets.

After this explanation you can see why I would consider remodeling before even considering the idea of renting.

But I like the idea of having a licensed Realtor come by and run comparables as-is and rehabbed.

Now the issue is finding a good Realtor.  Since I live 600 miles away, I have to plan my visits.  Any suggestions on where to find a good Realtor?
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October 16 2013
Depending on the market, buyers are paying a premium for fully rehabbed homes.  If you have the means to fully renovate the home, you could see a great return on your investment.  I agree with the other realtors on this forum that the best course of action is having an experienced agent show you what your home is worth as-is and rehabbed.  Then work up the rehab costs and see if it's worth it. 
Concerning your question about renting the home after rehabbing it, I would suggest holding off on major renovations until your ready to sell.  Tenants won't take care of the home the way that you will, and all home buyers will appreciate and pay for new renovations vs. buying something that was renovated 1-2 years prior. 
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October 16 2013
I would suggest having a licensed Realtor run comparables both ways - rehabbed/remodeled and as is - just to see what you could get.  It is a hassle to remodel but the results could be profitable.
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October 16 2013
Fix it up and sell it while all is new. Buyers will pay a premium.
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October 16 2013
Rent it out as-is!  The Rental Market is Booming!
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October 15 2013
Rent it out as is. Or just miner remodel.
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October 15 2013
It depends on the unit and what they sell for fixed up. Get a good Realtor in there to have a look and give an opinion. My gut is saying sell as is.
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October 15 2013
That is such a hard question to answer without knowing the specifics, but I do see the market cooling off from this past summer.  You are less likely to get multiple buyers bidding the property up moving forward.  We are also seeing buyers asking for larger concessions from sellers as the market softens.  So much to think about and if you want to discuss it further you can call me.
Best of luck!
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October 15 2013
This is one of the services that a good Realtor will provide for you.  we really can't be much help without seeing the home and putting it into the perspective of your specific market, however:

1.    Correct anything that a home inspector will call out thereby eliminating any negotiating leverage that the buyer might gain during an inspection
2.    Paint over accent walls that are in anything close to deep colors.
3.    Replace old carpet that has any damage or staining or is older than 5 years.
4.    Deep clean everything.

Out-of-date (dated) cabinets, counter tops and appliances are OK if they are CLEAN! Deferred maintenance is not cool.

All of these ideas are completely dependent on your price range, neighborhood location and a host of other influences.
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October 15 2013
There are a lot of factors that have to be considered. Feel free to contact me if you'd like to discuss.
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October 15 2013
 
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Fix up to sell or sell as is?
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