Repair before put on the market?

3 Replies

Hi All,

I plan to put my house on market after the tenant moves out in a couple of months. The tenant told me the ice maker in the fridge (10 years old) is not working. Don't think I can have it fixed. Shall I leave it like that? Besides that everything in the house else looks well so far.

What repairs are absolutely necessary, what is nice to have and what is no need?

Thanks

Pilar Jin

What's your competition look like when you go to sale? If you're in a hot market you might find that someone will pay good money as is and by the time you wait/pay for repairs you're going to come out more or less the same.

Example being-
185k house as is
Vs
205 with 15k in repairs. Let's say it takes you 3 months from start to finish before your house hits the market.

That's what an extra 5k and 3 month wait probably not worth the outlay. Add on 60 day close, that's 5 mo before you see your money and you're paying a note on a vacant house. Then say you did a 1031 that's 45 days to find a replacement and then 90 days ( I think) to close it so it's been almost a year before you're into a new property.|

Moral of the story, run the numbers.

A buyer will likely hire someone to inspect the property and will then re-negotiate or not based on what the inspector finds. You do not want to have so many things wrong that it scares the buyer, but an icemaker should not matter much. Getting an offer is the key and nothing gives back more for your buck than cleaning...and if it wont clean, repaint.

After a tenant moves out of a rental, you will have significant fix up work to get it ready to sell.  For instance, I sold a rental back in 2016 that had been occupied by tenants since 2009.  I had fully renovated it before the first tenant, but never had a chance to do much work since then.  I had only had one day vacancy and that was because I let a tenant stay one extra day.  I put about $20K into fixing it up for retail sale, with a $15K initial estimate.  The estimate to get it back to being rent ready was about $7K.  (That sounds like lot, but it amounts $83 a month.)  An icemaker is the least of your worries.  The question to ask is whether or not to replace all the appliances.  

I did, because many buyers struggle to make the down payment and closing costs. Let alone turn around and pay for new appliances or repairs.

Depends on your market and your price point, though.  And your competition.  Go look at similar properties in the neighborhood.  If they're all perfect and shiny rehabs, you need to match them if you want the price they will bring.  If you're OK with a lower price for the condition, then you may want to save your cash.  Banks sell REOs "as is" every day.   If your market is really hot, condition may not make much difference.  I saw a listing for a property in Seattle the other day that was completely gutted and nothing but OSB on the outside and it was still a million and a half bucks.