Thinking of selling your Manhattan apt-Does it make sense to renovate the kitchen?

A kitchen renovation can cost you anywhere from as little as $15k to $100k  or more depending on the size of your kitchen and materials that you choose. Doing the work can help you to stand out in a Manhattan building where there are a several similar units for sale. From what I have seen, it also depends on how long ago you renovated your kitchen. If it was within the last 10 years you may be able to leave it alone especially if you are going to be selling a Manhattan apartment under $1.5 million.

Also the likelihood that you will choose something that matches the taste of the buyer is small and if you pick too much of a low end kitchen the buyer may discount it and choose to renovate again. So pick something middle of the road that is not too flashy and not over the top expensive. If you put a $50,000 kitchen into a $1.5 million apartment chances are your return will be close to $35k-$40k. But if you put a $30,000 kitchen in, you will get closer to the $30k that you put in. A buyer purchasing in this range may not be willing to pay you extra for high end appliances and extra features so it will be harder to recoup your investment. Whereas a buyer shopping in the $3-$4 million range for a Manhattan apartment will appreciate the finishes and be willing to pay for the convenience of not having to do the renovation work themselves.

Consult with your real estate broker or attend open houses to see what would be customary for your price range in the way of finishes so as to not over or under spend.

Overall, factor in your cost and anticipated return and also the time that it will take to complete and if that will affect your ability to sell. As the market cools, it might be wiser to sell now and not do the renovation and just market it as is and let the next buyer do the work.

Take a look at the below kitchens and give your opinion. Renovate or sell as is…

Here is an older kitchen but well maintained. I wouldn’t renovate this one. What do you think?
Also a nice galley kitchen done within 10 years.
Windowed kitchen with room for a small table as well.
A kitchen also done within 10 years or so.

Is a flip tax bad?

Recently, I had a client looking at a co-op building on the Upper West side where there is a 15% flip tax on the profit made from the sale. At first, this would seem like a very high amount but considering that the maintenance charges were low at only about $1 per square foot, maybe it is no that high. An average co-op would have a maintenance about $2 or so per square foot. So a 2 bedroom apartment of about 1300 square feet will come with monthly maintenance of about $2600 per month on average.

The one thing to take into account when purchasing a co-op or condo in Manhattan is that you pay when you purchase, while you live there or when you sell. One way or another you will pay for the upkeep/improvements of your building. Some buildings are loathe to have assessments so instead their monthlies are higher. Some buildings prefer to assess and keep the monthlies lower.  Some buildings have you pay a flip tax when you sell to fill their coffers. So a flip tax is not necessarily bad. When you purchase a Manhattan apartment, part of the due diligence process is for your lawyer/CPA to evaluate the financials of the building that you are considering. Looking at the entire picture, flip tax, assessments and history of maintenance increases will help you to understand better the financial strength of the building.

How much money is a double brownstone block worth?

Many sellers of property in Manhattan may or may not understand the transaction from the perspective of the buyer. One of the aspects of a brownstone in Harlem is the appeal of the block itself. 10 years or more ago, there were many more boarded homes in Harlem than there are now. Nowadays, you might one boarded home on a given block in Harlem or none. However, what about the condition of the homes and how do compare a double brownstone block, one with brownstones on both sides and one with brownstones on one side and perhaps apartments buildings on the other side? How does this affect value?

Most buyers that come to visit a home usually comment that they like the block or the block seems okay without really asking or getting into the details of the makeups of the building on the block themselves. Certainly, if your neighbor is running an SRO or there are many apartment buildings on the block, the feel is going to be more transient.

Every now and then you see a row of brownstones that is by itself and most of the rest of the block is apartment buildings. One such property to my surprise has not sold in Central Harlem but this could be why. The block has about 10 homes and the rest are apartment buildings. Perhaps this is why the property has lingered on the market. Take a look at the two photos below. Which block do you find more appealing? What do you think?

 

 

189 Edgecombe avenue sold and closed

189 Edgecombe avenue, a single family home in the Hamilton Heights area of Harlem, sold and closed yesterday for $1.6 million. The property was a 16′ wide townhouse with 4bedrooms/2baths and plenty of original detail still intact. The new homeowner will restore this home by juxtaposing a top of the line renovation with the classic details already in place.

The property did not have a certificate of occupancy and the listing broker wore the dual hat of expediter and was able to get the Department of buildings to grant a letter of no objection to a single family use.

Take one more look inside this home below.

 

Thinking of selling your Manhattan apartment? Should you renovate?

Many times, prospective sellers ask if a full or partial renovation will help them to sell their Manhattan apartment? It really depends on several factors.

1-What is the competition like at your price point,neighborhood and building?

2-What is the age of your kitchen, bathrooms and flooring.

3-How long will the renovation take?

4- How much will the reno cost?

Let’s look at each one by one.

Competition- If there are several properties for sale that are similar to yours and many of them are renovated, you might have no choice but to do some work in your Manhattan pad before selling. However, if there is a shortage as can be the case for 2 bedroom/2 baths under $2 million for example,  the prospective buyer probably will be willing to do the work themselves.

Age of kitchens and bathrooms. If it’s been 30 or more years since the last renovation, you probably will benefit by doing the renovation. If it’s only been about 10 years then the answer is not as clear. Talk to your real estate broker to get an idea of how the apartment will be perceived by a prospective buyer given the age of the renovations.

Length of time for renovation to be completed-If it’s going to be a one year process due to building approval and contractor availability, it might be wise to forego it or scale it down a bit so that it can be completed in less time. Also, timing is an issue here. If the renovation completion date puts you right in the middle of the December holiday season, it might not be the best time to start marketing.

Cost of renovation- If you decide to complete a 6 figure renovation, it might or might not lead to a dollar for dollar return. It most cases it does not. For example if you have a studio apartment of 600 square feet with a value of around $800,000, a renovation of the kitchen, bathroom and flooring of around $50,000 may return dollar for dollar and also lead to a quicker sale. However, a $100,000 reno on the same apartment probably will lead to a quicker sale but not return dollar for dollar.

Sell as is? When you sell as is, you do not complete any renovation and just sell what you have. What you see is what you get and in some cases this might even be the best strategy depending on the above factors and your personal situation. Consult with your real estate broker.  Normally, they can recommend a good contractor to do work if that is needed as well as advise you as to what will yield a return and what will not.