How much price appreciation for a new kitchen? (square footage, 2014, comparable)
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I'm considering selling my one-bedroom brownstone co-op in NYC (not Manhattan). It's in a sought-after area where there are very few one-bedroom apartments on the market. It's about 675 sf. with 3 closets. Neighbor sold similar apartment (smaller bedroom, one closet) for $550 K in June 2014. The market appears to be rising since then.
Neighbor's apartment had an updated kitchen; mine does not. I'm wondering how much value I could get if I renovated my kitchen--or how much value I would lose by not renovating it. It's got linoleum and the cabinets date to the 1980s. Given the age of the building and other factors, a renovation would cost between 25- $40K. (With likely plumbing and electrical issues, it's scary to think what we could find behind the walls.)
In other respects the place looks good--hardwood floors/walls/paint in great shape (restored/painted last year).
I'd appreciate any input/advice from sellers, buyers, real estate professionals, designers etc.
Short answer, if you pay retail for your kitchen, you won't get your money back. Maybe new flooring to match the quality of the rest of the house, de-grease everything, maybe a fresh coat of varnish on the cabinets and new pulls.
As a broker in NYC, my professional opinion is that you shouldn't renovate; just ensure everything in the kitchen is clean and in good working order. You're not going to achieve a dollar for dollar return, and you might end up inadvertently turning off a significant portion of your potential buyer pool if the renovations aren't to their taste; better just to factor the cost of a renovation into the price and let the new owner deal with it, and any hidden surprises associated with the renovation.
As to what you would gain or lose by doing or not doing the renovation, it completely depends on your neighborhood. If you're in a hot neighborhood like Park Slope, Brooklyn Heights or the like, then your place will sell for top dollar, regardless of what you do. I will say that your particular type of apartment, a 1BR in the $500-750K range, is one that is in high demand city-wide, with very little supply; however, a lot of the people who could buy can't do so since they don't have enough for a downpayment. With your being in a co-op, that shrinks your buyer pool down a little bit more. There are definitely plenty of buyers out there, but your location will really be key, and the main determining factor, not the kitchen.
As a former owner of a high-end design and build firm, I would say that a kitchen remodel should be done for yourself and not to sell your home. 70-80 % ROI is what for project will get you. If you are going to be in your home for 7-10 years go for it.
As a broker in NYC, my professional opinion is that you shouldn't renovate; just ensure everything in the kitchen is clean and in good working order. You're not going to achieve a dollar for dollar return, and you might end up inadvertently turning off a significant portion of your potential buyer pool if the renovations aren't to their taste; better just to factor the cost of a renovation into the price and let the new owner deal with it, and any hidden surprises associated with the renovation.
As to what you would gain or lose by doing or not doing the renovation, it completely depends on your neighborhood. If you're in a hot neighborhood like Park Slope, Brooklyn Heights or the like, then your place will sell for top dollar, regardless of what you do. I will say that your particular type of apartment, a 1BR in the $500-750K range, is one that is in high demand city-wide, with very little supply; however, a lot of the people who could buy can't do so since they don't have enough for a downpayment. With your being in a co-op, that shrinks your buyer pool down a little bit more. There are definitely plenty of buyers out there, but your location will really be key, and the main determining factor, not the kitchen.
The above info is SPOT ON and should be heeded -- too many folks forget that the top three factors in all residential real estate are LOCATION LOCATION LOCATION.
While the OP has the neighbor that sold for $550K the offsets of it having a renovated kitchen need to be explained in terms of just how extensive the changes were. Do both units have a similar "footprint" with more of the neighbor's space given over to living area vs closets or did the neighbor have less sq ft to begin with? Is the other unit on a higher / lower floor? Any other unique factors in the co-op?
If the units truly are comparable perhaps buyers would try to negotiate down a price based on desire for upgrading kitchen BUT if the area truly has low supply and solid demand odds are the smart move is to let the buyer pay for a new kitchen that perfectly fits their needs / taste...
Thanks everyone. I had a realtor tell me not to renovate, but I wasn't sure if he was just looking to get a quick listing.
The comp is the only other apartment on my floor. The square footage is a bit less than mine, but it has a garden view and mine has a street view.
Thanks to those who reaffirm the importance of location. It really is in a great spot with regards to neighborhood and proximity of shopping and subways. We recently rehabbed the exteriors, front and back and will re-do the roof soon.
Not an expert, not even close, but from a consumers viewpoint I would say it would be worth doing anything it would take to make the kitchen look CLEAN. If the linoleum is torn, grimey, overwaxed, you might want to spend a few dollars replacing it with sheet vinyl. Ditto the cabinets, you might want to spring for painting them inside and out. Most new homeowners need to stay in a home they are remodeling, so the new owner would like to know that they could 'live with' the kitchen until they remodel to fit their own style choices. I'm sure your kitchen is clean, but there is a difference between clean and CLEAN looking.
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