Putting a half-renovated property up for sale is not an ideal situation for investors. But sometimes unexpected situations come up that you cannot control and can affect your personal and financial plans. Issues such as unemployment, divorce or a new baby may result in you having to sell your property, even if renovations are not finished.
There are several potential risks with selling a half-finished property. Many of the buyers that you want to attract may not want to purchase an unfinished house and those who do show interest may make an offer that’s less than ideal.
A realistic price tag
If you are not able to finish the renovations on the property, then the projected sell price may no longer be in reach. Interested buyers may use the renovations to help argue the purchase price down. So, you will need to work out what the worst case scenario would be to see if it is worth selling the property now.
Try to complete important areas
Certain rooms and areas on the property can have more of an impact on the price compared to other areas. A spare bedroom or bathroom that is half-renovated may not affect the price as much as an unfinished kitchen or main bedroom.
If you do have important areas that are half-renovated it may be in your best interest to either finish or tidy up the area as much as possible to try and boost the sales price.
Find the money to complete the project
If you are keen to make a profit from the property, you will need to seriously consider completing any renovations. However, you will need to think about how and where you can get the money to fund the project. Credit cards and other loans can be risky as they often have high interest rates and fees and could put you in debt even more.
If possible, you could consider taking on a temporary second job or selling your own items such as furniture or your car.
To get over the line and finish your project, you may need to rethink your budget and switch to more economical options for paint, fittings and other items. But remember; try not to make the property look cheap as this could also damage the selling price.
It is not ideal to have to sell a partially finished property. So to avoid this situation, make sure you do your research and you have adequate funds. Also try to keep the renovation timeframe as short as possible so that it lessens the chance of having to sell part way through.
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Disclaimer: while due care is taken, the viewpoints expressed by contributors do not necessarily reflect the opinions of Your Investment Property.