Renovations That Make You $$$
A: Renovations to Kitchens, Bathrooms, Floors, & Outdoor Space will get you the highest return on your investment at re-sale.
There are certain types of renovations that pay off very well in NYC, as opposed to any other housing market across the nation. Savvy investors and buyers are aware of these renovations that 'PAY OFF', and buy their next property with that focus. Needless to say, your apartment search should be limited to apartments that HAVE NOT been renovated thereby eliminating the net profit that is gained from the contracting work done.
The 4 MOST PROFITABLE types of renovations for homeowners are KITCHENS, BATHROOMS, FLOORS, & OUTDOOR SPACE.
All these renovations should add on about $1.50-$2 per price paid for contracting work to the eventual asking price at re-sale (depending on the quality of materials used). Obviously, if you install granite counters and BOSCH appliances, add on 2 times the price paid to your resale value. A simple formula can look something like this:
TOTAL CONTRACTING WORK x $2
TOTAL WORK DONE
Kitchen = $20,000
Bathroom = $5,000
Floors = $12,500
Outdoor Space = NONE
TOTAL = $37,500 of Renovations
With these high-end renovations, the formula would be:
$37,500 x $2 = $75,000
So if this particular homeowner purchased a apartment for $600K, and wanted to sell it now, he can safely list the apartment for $675K to the brokerage community.
There are other types of renovations that you can do to add value to your investment, but they will NOT pay off as well in the end. Some examples would be crown moldings, new paint job, add new closet to dead space, furnish closets, etc..
The reasoning behind why this formula usually rings true only in NYC, is different for each buyer. Perhaps the soon-to-be homeowners have no taste in renovating or have no desire to waste 3 months of headaches with contracters in their home. Fact is, this is a fast paced city filled with high earners that dont like to be bothered by anyone, especially contractors. There are more than enough buyers in this city willing to pay a premium not only for the renovations done to an apartment, but also for the time value and headaches that come with this work.
If you own a property and you would like to know what products will bring you in the most re-sale dollars, below is a list of manufacturers that I sorted into 3 categories.
MOST EXPENSIVE - ADD $2/PRICE PAID TO RE-SALE VALUE
BOSCH
SUB-ZERO
GRANITE/CORIAN Counters
CARRIAGE HOUSE FLOORING
AVERAGE EXPENSIVE - ADD $1.75/PRICE PAID TO RE-SALE VALUE
WHIRLPOOL
LEAST EXPENSIVE - ADD $1.50/PRICE PAID TO RE-SALE VALUE
FRIGIDAIRE
GE
Comments (1)
FREE GRANITE COUNTERTOPS with Kitchen Renovation!
Febuary and March 2009 Promotion!
Posted by vicky | February 19, 2009 10:38 PM