Everyone assumes fixing it first is the smart move. Sometimes it is. It requires three things to be true at once, and on most Toledo houses that need real work, at least one of them is not.
The three conditions
- You have the money, and you can afford to lose some of it. Renovation budgets run over. That is the base case, not the bad case
- The work returns more than it costs. Most repairs return a portion of their cost. Cosmetics return the most; structural and mechanical work returns the least, and mechanical work is exactly what an older Toledo house needs
- You can absorb the time. Three months of work, then two to four months of selling. Call it five to seven months of taxes, insurance, utilities and mortgage on a house you are not living in
All three, or the arithmetic does not work.
The arithmetic, on a real shape of house
A Toledo house that would be worth $135,000 fixed up, needing roof, furnace, kitchen, flooring and a cleanout. Call the work $30,000 and four months.
Fix and list
- Sale price: $135,000
- Renovation: minus $30,000, out of pocket, first
- Commission at the Ohio average of 5.90%: minus $7,965
- Conveyance fee, Lucas County: minus $540
- Title and closing, your share: minus $1,200
- Six months of holding: minus $3,600
Net: about $91,700, six months out, having fronted $30,000 and carried the risk.
Sell as-is, direct
- Offer: $97,000 in current condition
- Commission: $0
- Renovation: $0, nothing out of pocket
- Two weeks of holding, closing costs handled case by case and written into the offer
Net: about $96,000, two weeks out, nothing fronted.
Why the renovation lost here
Because $30,000 of mechanical work does not add $30,000 of value, and because the commission is charged on the improved price, so improving the house also increases the fee. You pay more commission for the privilege of having spent $30,000.
When fixing it up genuinely wins
It does win, and here is the shape of it:
- The work is cosmetic. Paint, carpet, a cleanout, landscaping. A few thousand dollars that moves the price by more than it cost
- One big item is the only thing wrong. A roof on an otherwise sound house frequently pays for itself, because it also reopens loan programs that would not fund it
- You do the work yourself and you actually know how. Labor is most of a renovation budget
- It is in a strong stretch of Sylvania, Maumee or Perrysburg where the finished value has real room above the neighbors
The trap is the middle case: a house needing $30,000 of unglamorous mechanical work, owned by someone who does not have $30,000. That is covered in repairs you cannot afford.
How to run it on your own house
Get one honest contractor number on the big items, then be conservative about the finished value. Read what your Toledo house is actually worth and what it costs to sell, and subtract everything before comparing.
We buy in Toledo, Maumee, Perrysburg and Sylvania, in any condition, with tenants in place and with back taxes owed, closing in 7 to 14 days with no agent commission at all.
Send us the address for the as-is column. If the renovation column wins on your house, we will tell you.
General information, not financial advice. The figures above are an illustration, not a quote.