Table of ContentsWhen it comes to selling a property, landlords often find themselves contemplating whether or not to undertake renovations. While remodeling can enhance the overall condition and appeal of the property, it may not always be the best course of action. In this blog post, we will explore the advantages and precautions associated with remodeling when selling a property, helping landlords make informed decisions to maximize their property value.Call or email us here >>Points to Consider When Remodeling at the Time of SaleWhen it comes to actually undertaking renovations, there are several key points landlords should consider to ensure a successful outcome. By keeping these factors in mind, landlords can maximize the value of their property while minimizing costs.Advantages and disadvantages of remodeling at time of saleImproved appearanceRemodeling can have a huge impact on first impressions, which are a huge factor when potential Buyers see the property.The older the property gets, the deterioration of used real estate naturally becomes more noticeable. It is very important to overcome these deficiencies when remodeling so that the age of the property doesn’t really show. The majority of people who are considering buying real estate highly value how a property looks, so it is easier to sell at a higher price.Renovation costs can be financed with a mortgageThe second advantage is that real estate buyers can utilize their mortgage to cover the renovation costs. Let's consider a scenario where a buyer purchases a property that hasn't undergone remodeling. In such cases, the buyer would typically bear the responsibility and expense of the renovations. They may opt for a renovation loan; however, it often comes with a higher interest rate compared to a regular mortgage. Consequently, when both a mortgage and renovation loan are utilized, the burden of loan repayment becomes quite significant.On the other hand, if the renovation cost is added to the purchase price of the real estate, the entire expense can be financed through a mortgage loan. This arrangement offers a clear benefit to the purchaser, as the landlord can anticipate selling the property at a relatively higher price.The buyer can move in immediatelyThird, buyers can begin moving in immediately after purchasing the property.Since there are a certain number of people who want to start living in the property immediately after purchase, it is possible to sell the property to such people in a relatively short period of time.Especially in early spring, when many people move, there is a large demand from people who need to find a new home in a hurry.The demerits of remodeling at time of saleRenovations are not always for everyoneNot all renovations cater to everyone, as they are often based on the landlord's personal design preferences. Even if a substantial amount of money is invested in renovations, there is a risk of unsold properties if the design does not align with current trends or lacks demand. This drawback stems from the uncertainty of prospective buyers' reactions, as you won't know their response until after the renovation and sales activities are initiated. However, it's essential to acknowledge and consider this riskThe longer the renovation the later the saleDepending on the scale of the renovation, construction may take several months.Basically, since sales activities cannot be conducted during renovation work, the longer the period is extended, the more the sale will be pushed back.The longer the period, the more the sale will be delayed. The renovation cost is, of course, a factor to be considered, but the construction period must also be taken into account.It is not always possible to add renovation costs to the sales priceAdding renovation costs to the sale price is not always feasible. As mentioned earlier, there is an option to include renovation expenses in the sale price, enabling buyers to finance them through a mortgage. However, it's crucial to note that renovation costs can amount to millions of yen. While it may be possible to allocate the entire sum to the mortgage loan, the significant increase in the loan amount may deter many potential buyers from purchasing the property.Furthermore, the addition of several million yen to the sale price can lead to a substantial deviation from the market price, making it challenging to sell the property. In essence, selling the property at a price that includes the entire renovation cost may prove to be unattainable.Points to Consider When Remodeling at the Time of SaleWe have previously discussed the advantages and disadvantages of remodeling when selling a property. Now, let's delve into the key points to consider during the actual remodeling process.First and foremost, it is crucial to keep the remodeling to the minimum necessary. As we mentioned earlier, it's not always feasible to include the entire renovation cost in the sale price. While enhancing the value of real estate through renovations and aiming for a higher selling price is a valid goal, it is equally important to minimize costs associated with the sale. Striving for cost-effectiveness, let's work towards maximizing the property's value while keeping expenses as low as possible.In some cases, remodeling itself may not be necessary. In the used real estate market, there are buyers who assume they can customize the property according to their preferences and at their own expense after purchase. Particularly in areas with convenient transportation, such as near train stations, these buyers are prevalent. It's advisable to consider the type of area where your property is located as one of the key factors in determining whether or not to proceed with remodeling. For buyers who intend to undertake remodeling, pre-remodeling by the landlord would serve no purpose. Caution should be exercised to avoid incurring excessive costs by tailoring the property solely to personal preferences.Focus on Repairs Rather Than Extensive RenovationsWhen selling used real estate, it is crucial to prioritize repairs and house cleaning over major renovations. Repairs address specific issues such as flooring scratches and wallpaper replacements, which are less affected by personal preferences and current trends. On the other hand, renovations cater more to individual tastes and can be risky if they do not align with buyer expectations.Additionally, consider repairing exterior elements and plumbing systems, as these areas tend to have a significant impact on the property's functionality. Assess the costs and construction timelines associated with repairs, and determine the appropriate extent of repair work needed. By addressing repairs in advance, you can minimize the risk of post-sale defects and allow buyers to personalize the property design to their liking.Equally important is thorough house cleaning. When prospective buyers attend property viewings, first impressions matter. No matter how well-repaired and tastefully designed the property may be, garbage or accumulated dust can leave a negative impression. Pay particular attention to cleaning the bathroom, restroom, and kitchen, as these areas hold significant importance for many buyers. The success of the sale activity heavily relies on showcasing the property's best features during previews.In Conclusion This blog post has highlighted the advantages and precautions associated with remodeling when selling a property. Remodeling offers the opportunity to make a positive first impression and enhance property value. However, it's crucial to consider trends and preferences, as their impact can greatly influence the effectiveness of renovations. Prioritize repairs and house cleaning, and opt for cost-effective renovations that strike a balance between enhancing the property's appeal and reducing expenses.By taking a strategic approach, landlords can successfully navigate the decision-making process and increase their chances of a successful property sale.