Featuring real estate articles and information to help real estate buyers and sellers. The Nest features writings from Georges Benoliel and other real estate professionals. Georges is the Co-Founder of NestApple and has been working as an active real estate investor for over a decade.
Should you renovate your home in New York City before selling? The answer isn’t clear-cut. What is the cost of renovating an apartment in NYC? On the one hand, a renovation in NYC of your co-op or condo will sell faster than an apartment that is dated and looks worn. A renovation in New York City will fetch a better offer or a higher price and even make your apartment stand out on home buying sites like Zillow. The longer your listing sits on the market, the more people looking at it will think there’s something wrong with it or overpriced. This post will go over the financial and emotional average cost of a renovation in NYC (labor and materials)
On the other hand, if you’re selling and don’t have the funds to renovate in NYC, it’s not a good idea. And besides, the amount of money you can afford to do a reno may not result in you recouping your losses when factoring it in when you and your broker decide on the sale price of your home.
Really, to reno or not, you have to consider the type of property you are selling, the condition it’s in, and how much you’re willing to spend or have to pay.
There’s no doubt that homeowners can benefit from renovating their apartments. But what should you renovate in New York City to make a significant, noticeable impact? And can you get away without undertaking a renovation in NYC by simply painting your walls? We’ll let you on with the things you can do to increase the value of your home, as well as how to undergo a renovation in NYC when you need a condo or co-op approval, which is specific to each type of apartment.
To get the right asking price, work with your agent, who will know about the market and the comps in your area or your building. And you, too, can help by checking out price history on sites like StreetEasy. Don’t forget to look at apartments that have been sold either “as is” or renovated.
Before you start renovating, you need to know what type of job you consider doing. That’s why there are three different types of Renos to make it easier for you: gut, partial and cosmetic.
Cost: $100—$200 psf
The gut renovation in NYC is when you want to alter your entire apartment. It involves moving or getting rid of walls to make the apartment appear larger, has an open concept feel, or add another bedroom.
When walls come down or up, many buildings will ask (read: demand) you to make updates to what’s hiding in or behind the walls, which is the electrical and plumbing. A building will ask you that to maintain the integrity and infrastructure of the apartment.
These updates add hundreds or even thousands of dollars to your already-expensive gut reno. In most cases, when undertaking a gut renovation in NYC, what most homeowners add to their condo or co-op is another bedroom. But that carries a lot of risks. If you have one bedroom big enough to split into two, this may help as a selling point.
But if you have one bedroom that isn’t that large, squeezing one out so that you have two beds on the small side will probably do you disfavor.
It has to be a “legal” bedroom, and you should understand all the requirements before undertaking the task. If your new bedroom has no door and no exterior-facing window, it’s not a legal bedroom.
That’s the general guideline, but there’s more. We looked at the Housing Maintenance Code for New York City and found a legal bedroom must-have. These are:
If you can’t meet all the requirements, then you shouldn’t add a new bedroom.
Partial renovations often focus on altering one or two spaces within the apartment. Usually, this is a kitchen and bathroom upgrade. But if you can only do one reno because you lack the time or the finances, center on the kitchen.
An updated kitchen always boosts the value of your home. It’s no surprise that buyers are willing to pay more for high-end appliances and other upgrades like changing outdated countertops.
Prospective homebuyers don’t want to see white appliances, refrigerators that stick out, are not integrated into the wall for a custom look, and laminate countertops.
It used to be solely the family room. Many kitchens, especially in pre-war apartment buildings, are small and cut off from other apartment areas in the city. Suppose the kitchen feels airy, features professional appliances, and can fit an island for friends and family to gather around. In that case, your apartment will likely sell quicker and maybe even sell more than the asking price.
The bathroom renovation is just as expensive as a kitchen renovation. But like the latter, the former will also possibly raise your apartment’s sale price or make it more desirable. The bathroom reno includes retooling the infrastructure, most likely to run water to the toilet, bathtub, shower, and sink.
In most cases, a large, updated shower with several water sources and features like an integrated seat and fine finishes like marble walls will substantially increase your condo value. But that takes ripping out existing tile and a total retooling of the infrastructure to get the toilet, bathtub, shower, and sink working.
The cosmetic renovation is a simple touch-up that comes with a low and affordable price point. This includes painting the walls white or neutral colors because homebuyers don’t respond well to bright colors, getting rid of clutter, and moving prized or sentimental possessions to storage spaces. After all, buyers can’t see themselves in the apartment if your walls are lined with pictures of your family.
If you can get away with the cosmetic reno, you’ll save a lot of time, paperwork to get your project approved by the co-op board or the building, money to make changes to plumbing or electrical work well as not having to acquire permits.
If you’re putting your apartment on the market, ask yourself if your kitchen appeals to you. If it doesn’t, it probably won’t impress prospective home buyers. That’s why renovating your kitchen can add value to your apartment and give you more of a chance of recouping the expenses you poured into the remodel.
A new kitchen means one less thing home buyers will have to take care of. So it’s usually a prominent selling feature provided it’s been done right. When you renovate your kitchen, you can typically increase your sale price by 10 to 20%.
But there is always a risk, as you may not recover the entire cost of your reno or be able to sell it at a higher price point. Still, you will undoubtedly sell your apartment faster than if you hadn’t done the reno.
The guiding rule is that the property itself should tell you what to put in and what materials and finishes to use. The cost of the new kitchen should reflect the cost of your apartment. If you’re selling your one-room zero square foot studio, then you can probably get away with using Ikea cabinets. But if you own a pre-war classic six that costs over a million, you should splurge.
To avoid negatively affecting your home’s resale price, aim to spend 5 to 15 percent of your home’s value on your kitchen remodeling project. Many home sellers assume they’ll have to pay $60,000 on a new kitchen, appliances included. But you can get away with spending half of that if you’re not shopping at expensive showrooms like the iconic and high-end Krup’s Kitchen and Bath in the Flatiron District.
That will depend upon what you can afford or what you have a budget for. Here is what you should focus on.
People love wood floors. Putting them in your kitchen will make it look high-end. Tile in muted colors also works. If you can’t afford wood, try to stay away from laminate refinishing flooring.
You will worsen your reno as the discriminating buyer will be able to tell the difference. And since the kitchen is the most high-traffic area in your home, anyone would notice what they are stepping on.
When painting the kitchen walls, you should stay away from bright colors like red or pink. That should be a no-brainer. You want a color that will appeal to anyone, not a slight flew.
That means low-key or muted colors. White, off-white, light gray, and light beige will not offend prospective buyers or turn them off.
Cabinets are the most expensive part of a new kitchen. Since white kitchens are the rage, you should get wood cabinets painted white. To avoid the high cost of cabinets, keep the boxes and add new doors. Having some doors with glass fronts will always delight homebuyers because they make the kitchen look very custom.
Another option to avoid adding new doors is to sand your existing ones and repaint them, And don’t forget to switch out the hardware. Chrome or polished nickel or brushed nickel work well as hardware because they match any kitchen architectural design or base color. Just stay away from brass, as that is not universally appealing and looks flashy. Installing new hardware will make your kitchen cabinets look high-end.
Countertops can be costly too, but like cabinets, they are very noticeable. As such, they should be changed. For the budget-conscious, ceramic is very affordable and comes in many different colors and patterns. Some even have designs that mimic granite, for example.
Or you can consider using synthetic materials like quartz and porcelain. These are affordable, not to mention that they are resistant to heat and stains, scratches, and no sealing required. But if you have the money, go with granite or marble. Your kitchen will look entirely bespoke if you do.
If you have white appliances that were all the rage in the 1980s, get rid of them. They look dated and cheap. Homebuyers want a professional look.
This means stainless steel appliances, from the refrigerator to the dishwasher and the oven to the stove. But not any stainless-steel appliance.
If you put in a gas fuel range made by Cosmo and sell at Home Depot for around $1500 or less, you are canceling out all the high-end details you just installed. Savvy buyers want the brand name. They want a Viking, Wolf, or Thermador range, a Miele dishwasher, and they know the cost of each because they are desirable and coveted in kitchens.
For the fridge, there’s only one name. Sub-Zero is the star of high-end refrigerators. Homebuyers who see your kitchen are going to know you spent a lot of money on the fridge.
The starting price range of a Sub-Zero is somewhere in the $7,000 range. The average fridge that has no brand recognition and awareness costs between $1,500 to $2,700. Is the Sub-Zero worth it?
Well, that again depends on how much you want to spend. But note that professional appliances are always a selling point.
Integrated panels also look high-end because they make appliances disappear into the cabinets. That could be a good choice if you want uniformity. And homebuyers respond to paneling because it makes a kitchen look clean and streamlined.
In the bathroom, selling points are a walk-in shower with ample room to move around, some excellent lighting like wall sconces, and expanding your square footage to install a bathtub (a white claw-foot tub is all the rage) to keep in mind families who have babies or small children.
If you can’t do any of these things, shoot for the small stuff. The result should look not only functional but also clean. So “small stuff” would mean painting the walls, putting up new tile in the shower if yours look old and grimy, reglazing a tub if you have one, buying new lighting fixtures like sconces, and changing out the medicine cabinet for a newer one. If you can’t change your sink, you can update it with new fixtures.
But the products you can choose to use can be very affordable. For example, use middle-range stores like Pottery Barn and Restoration Hardware a step above Lowes and Home Depot. At RH, you can buy a traditional medicine cabinet for under $500. At Pottery Barn, a single sconce can cost you only under $100.
For faucet fixtures for the sink, you don’t have to name brand and buy Kohler. No one will notice the difference if you get a traditional-looking widespread faucet at Pottery Barn for around $650. It’s good for the budget-conscious to know that this new faucet is cast of solid brass and has a thickly plated finish for an upscale and durable look.
Unlike in the kitchen, where the appliance’s brand name is emblazoned on it for all to see, the fixtures in the bathroom don’t come with signature labeling. So you can save a lot in a bathroom reno by going generic. You may have to get an electrician to change or update the lighting, But if an electrician costs a lot, don’t change a thing.
Similarly, avoid moving around a bathtub, putting in a new shower, repositioning a toilet, or adding a new sink because you’ll need a licensed plumber to run new lines for these things. You won’t like the cost. A licensed plumber can cost you above $5,000.
If you can’t afford a renovation in NYC but want to update your apartment, you can make many minor improvements that won’t cost must.
You can stage your apartment. Get rid of your old or ugly furniture, put them in storage or throw them away, and let the stager add pieces to your apartment that are neutral but still stylish and admirable. The cost for a New York City staging is around $10,000.
If you have burned-out light bulbs, replace them immediately. If you don’t, there’s the risk that a home buyer may think there are problems with the wiring.
You may have used extension cords because you don’t have enough outlets or added them for convenience. Eliminate the ones you don’t need because this too can make a home buyer concerned.
If you have windows and doors (especially closet doors) that don’t open and close properly, or if you have leaky faucets, get someone to fix these things. If there was water overflow from the apartment above you that left a stain on your ceiling, get the drywall repaired and paint over the stain to decrease the chance that a home buyer will think there’s a leaky pipe.
The goal here is to make your apartment look better in the home buyer’s eyes. Whatever you do, real estate brokers agree that your apartment must look and feel light and airy after you make minor or major adjustments. For example, that will come across when you decide to paint your walls.
The primary purpose of co-op and condo renovation rules in New York City is to ensure that your proposed renovations won’t harm the building, ensure that you and your contractors have adequate insurance, and maximize the likelihood that construction is orderly and considerate of fellow residents.
The alteration agreement is the most important rule that a shareholder in a co-op building must follow if undertaking a renovation in NYC. The contract between the shareholder and the co-op building prevents the building from suffering any damages during the renovation. It’s not unrealistic for damages to incur.
For example, what if you’re renovating your bathroom and the pipes have to be changed or relocated? This may cause an overflow of water and result in leakage that seeps through the apartment’s ceiling beneath you and damages it. Moreover, it’s also likely that the building’s heating and plumbing system may be compromised.
These are all damages the co-op wants to protect against. You cannot start on a reno without fulfilling all the obligations outlined in the alteration agreement. The principal duty is that the co-op has to be informed about what the renovation exactly entails.
This can be fulfilled by having the co-op review the drawings prepared by the shareholder’s architect. After the co-op approves the drawings, then an agreement is made. The reason behind getting the exact details is to protect the building if the shareholder’s reno exceeds the scope of the work proposed. The drawings’ approval is also to make sure you are not planning anything that will negatively harm the building.
Typically, the co-op building will hire its architect to review the proposed renovation and keep an eye on the progress of the work as it proceeds. The co-op will almost always let you hire licensed and insured contractors.mAnd you should always plan. Your reno may be stalled if the co-op rules the time of year your work can be done.
Also, you have to be mindful of when your reno can be completed. The co-op will be concerned about the length of time your work will continue because it will affect your neighbors. For example, elevators have to be shut down for neighbors when your contractor and his workers use them.
There may be health concerns involved, such as rubble and dust getting on neighbors if they share an elevator with one of your workers who may be covered with such hazardous materials.
As for the finances, the co-op building will make you pay for their architect. It will also charge you a hefty security deposit as a guarantee that you adhere to the scope of the work and not deviate from it in ways that significantly alter or exceed the agreed-upon terms. If the work is drawn out and goes over the proposed schedule, the co-op has the right to penalize you.
Besides, the board may also request that you pay the co-op board’s fees to review and approve your plan. That’s in addition to the board hiring their architect. These fees, taken together, will ultimately make you decide whether you want to proceed with the reno; you may have only budgeted for work done but hadn’t considered the charges that the building imposes on you.
The rules regarding a reno for a co-op are almost the same for a reno done on a condo. The difference is that the rules are looser in a condo renovation in NYC. For example, with the co-op, the architect will be stricter.
You may get pages and pages of comments from the architect regarding your reno that may overwhelm you and lengthen the approval time. But you have your architect on your side; give the comments to them, so you don’t have to worry about them.
An alteration agreement will also be in place in a condo, but it will be easier to follow than a co-op. To protect the building, the condo board will also hire an architect. If you can follow the alteration agreement made between a co-op board and the shareholder, you will have an easier time renovating your condo.
You should always prepare ahead before your reno starts to be on the safe side. Your electrician may arrive late to the scene. It seems like a bit of a thing, but it’s not. Any delay will derail your project.
But if you work with an accountable and reliable staff and recognize that a period is always up in the air, you can minimize any possible problems that may occur.
Similarly, know that a reno doesn’t happen in a week or two. It often takes more than that. Your contractor can tell you how long a reno will occur and how it works in New York City. The period accounts for all the moving pieces to come together.
The owner needs to find an architect and licensed contractor before you start. You need to get building permits. You need to undergo a lot of paperwork to get approval for the reno by either the co-op board or the condo. The building has to get ready for your reno.
Pay close attention to your architect because he can do more than you think he can do. An architect can help apply for permits, study the condo or co-op board approval process to ensure it’s up, and assist you with your insurance coverage requirements.
Since the pandemic started, a lot of reno projects have been shut down. But these days, buildings are beginning to allow homeowners to undergo a reno or continue with one stalled as a direct result of Covid-19. So it’s important to know that you must work with your building because the building may have imposed Covid work hours and restrictions, which can also delay your renovation in NYC.
Most buildings permitting Renos are stricter now. Of course, contractors and subcontractors must use face masks at all times and keep six feet apart from neighbors in the building. But some buildings are behaving like doctors’ offices by having workers take their temperature before they enter the building. And of course, now there’s increased cleaning and disinfecting common spaces like hallways, floors, and elevators that contractors and workers have used or touched.
The amount of money you’ve set aside for your renovation budget will always change during a reno. It’s important to tell your general contractor what you can afford before he proceeds with the work. There may be problems that you couldn’t have conceived during your reno that will raise your budget.
Once a wall or two is down in an entire reno situation, your contractor may find that the plumbing is rotted, the electrical wires are frayed, and the wood joists are sagging if you can’t afford to fix these things. Then you haven’t planned. Here planning means reserving funds beyond your budget money to take care of surprise costs.
The NYC Department of Buildings requires that you obtain permits for works that require construction or modification. This means the plumbing, the electrical, and various inspections. All these permits add up. An electrical permit can cost around $900.
A plumbing permit can start at $2,000 and can go up to $5,000 and even more.
A good contractor can make for a smooth sailing reno. But before you hire him or anyone working on your reno, do your due diligence. Always vet the contractors. Ask for references, ask to see their previous work, ask how much they cost, how many years of experience.
Also, ask if there are any fees if work can’t be completed on time (usually these fees are will be imposed by the building), and always get approval about the materials you want to use.
Your goal here is to be on the same page with the contractor for complete transparency.
Keep in mind that there are two things a contractor must have. He needs to have liability insurance and workman’s comp. If frayed electrical wires somehow ruin the wiring in your neighbor’s apartment, you need to know what insurance will cover that error.
If it’s the contractor’s insurance, then that means you won’t be held responsible for the damages. But to be on the safe side, make sure your homeowner’s policy protects you if a problem arises due to a contractor.
Whether it’s gut or cosmetic, a renovation in NYC will always present your apartment in a flattering light. It will change the sale price of your home and attract home buyers. But beware of all the money you need to spend. Remember, it’s not just paying the contractor and your architect, but also paying for the materials and appliances and features you plan to use, as well as paying for all the expenses to get board approval by the co-op or condo.
Also, bear in mind what you spend is tax-deductible from a capital gains point of view, of course. We also have seen sellers of renovated apartments negotiate and reduce the percentage of broker fees as the home is easier to sell. Therefore, closing costs are lower for the seller.
If you’re not careful, your reno will increase in cost and take longer than agreed upon. The best thing you can do is always proceed with caution and know where your money is spent. Suppose you consider all these things. Your renovation in NYC will flow smoothly.