Moving on Better: The Three Best New Year Renovations for Your Apartment
Happy 2015! We all usually ring in the New Year thinking about changes: to old habits, to new diets, about fun activities to explore. And when it comes to your apartment, change can be good- and profitable. In this edition of The Bamberger Report, we’ll tell you which home renovations maximize the value of your apartment and increase your overall quality of life.
Taking the (remodel) Leap
About six months ago, I got a call from a Park Avenue apartment owner on the market to sell. He bought his one-bedroom unit in 2012 for $470,000, but had put in about $100,000 in renovations over the past two years. He was looking to let go of his home- now complete with a new kitchen, a redone bathroom, dazzling floors, and a top-of-the-line wine cooler- for $725,000, which would include a $255,000 gross profit.
We put the revamped Park Avenue apartment up for sale. It was gone two weeks later for $700,000, hauling in a $130,000 profit and a 28% return on investment, a record for the highest price per share in the building. The owner was left a happy man.
The anecdotal takeaway: renovations can have a huge financial impact on the value of your home. The flipside: they are extremely personal-not to mention herculean- efforts to undertake. Remodeling an apartment to fit an owner’s particular needs does not always translate into a higher price tag. I have seen cases where apartments languish on the marketplace for months without generating buyer interest because they have been designed for too-specific tastes.
So while I experienced an immediate success story with my Park Avenue client, it’s important to consider why you’re deciding to renovate before making the big investment.
But whether you’re motivated by personal reasons or financial interests, remember it’s ultimately all about balance.
The Five-Year Rule
Before breaking out the tape measure and your collection of home decoration magazines, consider how long you’re planning on staying in your apartment.
And try going by the five-year rule.
“If you’re planning on living in the apartment for more than five years,” says interior designer John Chadwick when speaking to The Bamberger Report, “renovate to your taste and don’t worry about value. In all likelihood the wear and tear will devalue the renovations regardless.”
However, if you’re planning on living in an apartment for less than five years, it’s a smart choice to treat the property as a flip.
Chadwick, whose work has been featured in some of the top design magazines in the country, recommends you then approach your apartment with a focus on “smart renovations,” including in your kitchen and bathroom.
“Sometimes it may mean a total gut job, other times just a light touch up,” he concludes.
“And add a washer/dryer if you can!”
This last tip is not unfounded. Brokers and building managers alike have been quick to note the rising popularity for washer/dryer units in individual apartments over the past decade. Despite increasing demand, a 2010 New York Times article reports that only 20% of sales and apartment listings in Manhattan include these units, making them a still hard-to-find luxury.
And while The Bamberger Report can confirm that installing a washer/dryer unit is a premium for any New York apartment, there’s little doubt over whether other two basic remodels can guarantee a boost on your return.
Remodeling Magazine’s annual New York cost vs. value report, one of the most reputable studies on renovation in the business, reports that a bathroom and minor kitchen remodel can add average respective returns of 2% and 6.5%. Even more impressive: both figures reflect a price higher than whatever the renovation may have cost.
With numbers like these, it’s worth breaking down the smartest ways to approach remodeling these spaces.
First, a focus on the bathroom
It’s easy for bathrooms to become outdated, which makes it especially important for any homeowner to replace damages and consider thorough cleanings before selling the apartment. If you’re remodeling, don’t underestimate the importance of picking the right appliances- especially the faucets.
“In the overall scheme of a bathroom, the sink faucet might seem like an incidental detail, but its design can set the tone for the whole space,” says home improvement expert and television host Bob Villa.
According to a 2010 Brick Underground article, architect Penny May recommends some of the following renovating options if you’re looking to update your bathroom:
A Quick Kitchen Fix
It’s profitable. It’s utilitarian.
But whether you’re considering updating appliances or undergoing a drastic culinary space transformation, here are some important aspects of a kitchen remodel to consider:
Washer/Dryer: The Ultimate Status Symbol
Though most high-rise apartment buildings already have a laundry room, most co-ops restrict residents from having washer/dryers in their apartments. According to the board presidents The Bamberger Report spoke with, the main concern of allowing residents to install this amenity would be the potential for overloading building pipes and plumbing.
But times are changing. According to Habitat Mag, electronic manufacturers like Bosch and LG have been releasing models that rely on less gallons of water for use than the ones released forty years ago, therefore creating less pressure on more sensitive pipe systems. These smaller sizes, reports the New York Times, also makes the units easier to fit into more compact spaces- an always useful design trait when it comes to Manhattan real estate.
And as we mentioned above, it’s a smart investment for an apartment seller. Though The Bamberger Report was not able to find reliable statistics due to a lack of empirical data, evidence from articles, buyers, and real estate experts suggest that installing a unit could increase your apartment price tag by 5%.
“Prospective purchasers say it’s a huge amenity,” says building property manager John Spellmon when speaking to Habitat Magazine.
Bottom line: Some New Yorkers try to sneak a washer/dryer into the apartment, but given the potential board-repercussions and possibility for piping damage, it’s probably not worth the angst. Instead, check your building rules. If allowed, have one installed. There’s a good chance you’ll be improving your apartment’s value substantially- not to mention eliminating quite a few trips to the basement.
A Word From Dan Bamberger
Whether you decide to do a basic kitchen fix-up or a more intricate renovation such as installing special moldings or a wine cooler, it’s also important for you to consider the features of surrounding apartments, both in your building and in the neighborhood. Buyers usually look for apartments in one specific area to follow a particular aesthetic; you want your apartment to satisfy this “norm,” but also be a tad more spacious and modern.
While I certainly hope that our findings will be useful to you the time comes to sell your apartment, I can never stress enough how much you consider your own personal tastes when it comes time to renovate. These are tips, not rules. Your apartment is more than an investment; it’s a home. I hope this article has left you a well-informed homeowner with the tools to become an equipped and savvy investor.
At the end of the day, if you want to splurge on an exotic tile counter or a funky bathroom design, do what makes you happy. Don’t forget to get comfortable.