Looking to renovate in New York, but unsure how much your project should cost? Welcome to The Bottom Line. Each column features a real-life estimate prepared by Bolster--a New York City company that has designed a transparent and enjoyable process for area homeowners doing major renovations—along with tips for scaling the project to suit your budget.
A 1,200 square foot Tribeca condo loft.
The Wish List
Alex, who loves to cook, wants to flip the loft’s layout and make the kitchen the centerpiece. She’ll need a semi-professional oven and a great entertainment area. She also wants to replace all the windows and install central air conditioning, a powder room, and a laundry room. Her overall objective is to update the interior to make the space sleek and functional for her lifestyle.
After saving up for several years, Alex has $400,000 to spend. The architects she interviewed told her that the cost of her project would exceed $500,000, and one architect quoted his fees at 30% of the project’s (unknown) cost. Unsatisifed, Alex began researching her cost options online, and discovered Bolster.
Within 48 hours of receiving Alex’s initial email, Bolster visited her apartment to review the project and prepared a Cost Report with a narrow minimum / maximum range of costs.
"While estimates traditionally aren’t as detailed or reliable as bids, 98 of 100 Cost Reports that have progressed to the bid stage have fallen within the stated minimum-maximum range," says Bolster's CEO, Fraser Patterson.
Traditional renovations typically fail to stress test the owner’s budget against the scope of the work the architect has been asked to design, resulting in contractors’ bids coming in significantly higher than anticipated. Owners end up with sticker shock, and architects must then undertake a complicated, and sometimes painful, re-design process.
Alex, by contrast, will avoid a major headache by doing her project the right way. Her Cost Report, which you can review in detail by clicking here, estimates that the cost of her renovation including architect fees will fall somewhere between $397,857 ($329 per square foot) and $563,742 ($463 per square foot). Importantly, the Cost Report also points to the areas where she can save money and get a result she will be happy with for her $400,000 budget.
- Design: $66,000 - $80,000 Design costs will depend on how much guidance Alex gets from her architect. If she has a clear idea of what she wants the look of her revamped home to be—complete with appliances, fixtures, and finishes—then she’ll be able to specify many of the materials for the renovation herself, and save a bit of money. Another major variable is central air conditioning and heating (HVAC): If that’s a must-have for Alex, she’ll need a mechanical engineer to oversee the installation, upping the costs for this aspect of the project. (Pro tip: some MEPs—that is, engineers who handle mechanical, electrical, and plumbing—do the engineering plans as part of their package if you buy their product.)
- Compliance Fees: $15,000 - $19,000 Compliance fees cover things like expediting—that is, making sure all your required documents and permits are quickly filed and processed at the Department of Buildings—and depend on the final scope of your project. As Alex and the Bolster team finalize her design, this will get easier to calculate.
- Rough Construction & Labor Costs: $161,000 - $232,000 These costs cover the raw materials needed for the renovation—think sheetrock, plumbing pipes, electrical conduits, and carpentry—as well as the labor to install them. During the initial planning stages, these costs will be calculated using Bolster’s algorithm to give Alex a clear idea of what percentage of her budget will go toward these materials.
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- Fixtures, Finishes & Appliances Allowance: $32,250 - $46,500 Alex hasn’t yet selected these, but Bolster has calculated a range for what they could likely cost. Her challenge now is to decide where in her home she wants luxe details, and where she doesn’t mind skipping the brand-name products and opting for something more affordable. For example, rather than opting for an expensive designer refrigerator, she could buy an economical model and cover it with a cabinetry panel. She can also take advantage of seasonal sales to find deals on high-end items.
- Project Management & Mandatory Insurance: $48,000 - $70,000 Indirect costs, like labor and insurance, vary significantly depending on the scope of a project. In Alex’s case, opting to flip the layout of her loft will naturally mean a higher renovation budget, and in turn, require budgeting more for the necessary insurance coverage. Furthermore, the more expensive the materials she uses, the more pricey labor can be, as installation may be complicated and time-consuming.
- Contractor Overhead & Profit: $81,000 - $116,000 Because these fees are a percentage of the project budget, they depend on Alex’s overall construction costs. It’s crucial that Alex, her contractor, and her architect understand where each dollar is going—needing to make changes mid-renovation can send costs soaring.
- Bolster Financial Guarantee: $16,000 - $23,250 Approximately half of renovation projects in this country go 40% to 200% over budget; moreover, each year, 17.2% of New York contractors go out of business, taking 77,245 projects and $700 million of clients’ money with them. If Alex uses a non-Bolster contractor, her financial exposure to cost overruns and contractor failure on her project are $350,554. By choosing a Bolster contractor, Alex’s cost overrun risk will be limited to $42,766, about 10% of her project’s cost. Or, for $16,000 - $23,250 (depending on the finalized project budget) she can opt to have her project financially guaranteed by Bolster, reducing her risk of cost overruns to $0.
The Bottom Line
The biggest takeaway from Bolster’s Cost Report is that Alex can go ahead with a renovation project on the scale she was hoping for. Now, her project has entered the sketching phase, with design commencing shortly. With some careful construction decisions, she can revamp her home with a mix of high-end products and more affordable items, and still stick to her budget. Incidentally, as we proceeded with this project, we found out she could add another legal bedroom to her apartment. This in turn means her property will look better, and will appreciate as it will become a two-bedroom loft. Plus, her budget remains at $400,000, including the new room. Good news all around!
About Bolster’s Cost Reports
Homeowners rarely get reliable and accurate information upfront about their project's total cost before hiring professionals. Bolster's free Cost Report—typically provided within 5 days of a walk-through of the project--provides a statistically accurate range of costs from proven professionals to help you make informed decisions about the scope, design and cost of your renovation project, before you incur professional fees.
Every year, New Yorkers waste over $700M following the usual renovation process. Bolster is different, using a scientific approach to match you with the highest-quality professionals and financially guarantee your project is delivered beautifully for a fair price - all at no extra cost.
To start your major home renovation project, visit bolster.us.
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