Transformation: My JR4 into a 2BR
Note: Was asked by a few buyer clients about this topic so I figured to re-publish what I did with my JR4 when I sold. This post was originally published in Jan, 2006 so please put yourself back into time and place. I'll do quick add on at the end.
A: As I wrote about in a previous post, What To Do With Your JR4, I just started renovations on my JR4 in which I'm changing the alcove into a true 2nd bedroom. Marketing a 2BR property in Manhattan should allow me to greatly maximize the return on this $4,500 project!
In New York City, there is quite a disparity between the selling prices of a 1 bedroom and a 2 bedroom apartment. After all, a 2 bedroom apartment gives you enough room to grow into should you decide to have a new baby or a roomate. The price difference in the Upper East Side looks something like this:
AVERAGE SELLING PRICE 1BR / 1.5BTH CONDO IN UES
AVERAGE SELLING PRICE 2BR / 1.5BTH CONDO IN UES
AVERAGE SELLING PRICE 2BR / 2BTH CONDO IN UES
*Note: Add on some premium for prime location, luxury buildings and those apartments that have been fully renovated or have outdoor space!
To market your property as a true 2BR apartment that won't leave buyers frustrated when they come to see it, you will need the 2nd bedroom to be at least 100 sq. ft., have its own window (a must) and HVAC, and its own electrical switches and closet. Just putting a wall up will not cut it and will leave buyers unsatisfied when they come to preview.
Most JR4's have the window and HVAC in the dining/office alcove leaving you with the job of closing off the room, adding a closet, and doing some electrical work. All in all, expect to pay about $5,000 for this work to be done. A new paint job will seal the deal and put your apartment in the 'sell-o-sphere' of a 2 bedroom! You should be able to add on around $75K to your asking price, depending on the last 2BR that sold in your building; although, you will need to price yours lower to accomodate for the lesser total space.
Here is my alcove space before the transformation:
Here is how it looks after Day 1:
Here is how it looks when completed:
The 2nd BR measures 10'4" x 10'8" and has a closet with 2 shelves and a pole for suits/shirts/pants. For Manhattan, it is suitable for most buyers who require a 2nd bedroom.
Before I start advertising, I need to do some fine tuning to the floorplan using photoshop to reflect the changed layout. I also need to do some research on what 2BR condo's are going for in my building and my neighborhood. I'll be sure to price mine below these (which is still way above the most expensive 1BR condo listings) to spur activity and get traffic into my open house!! In the end, the goal is to have the most aggressively priced 2BR condo on the market.
ADD-ON (2/21/2008) - Careful with pricing as your target buyer to make this strategy work most profitably is young/mature, looking for a starter home that could be scalable if their family grows! It is not for those who need a true 2BR, an extra 200 sft, at least 2 full baths, and a separate dining room! So, make sure you discount your converted 2BR properly or it will get little traffic.