It's one of the first questions to think about when you're considering whether to put your apartment up for sale: how much work should you put into it, if any? Will a glossy gut renovation jack up the price a few hundred thousand dollars? Will a coat of paint and some floor polish accomplish about the same? Should you make the apartment look generic for maximum marketability? Or should you indulge your passion for glass-tile walls? What about just putting the place up for sale, cracked tiles and all?
We spoke to some New York real estate professionals who deal with these quandaries every day. The prescription varies dramatically depending on the specific property and the owner's personal situation, but they were able to provide some rules of thumb.
The emotional and the financial calculus
"You could bifurcate this into the emotional toll and the financial burden of the renovation," says Asher Lipman, who advises New York City homeowners, buyers, and real estate agents on renovation issues under the name nycRenovationCoach. "If there’s emotional or personal issues—you’re old or you’re retiring or someone died—whatever the personal reasons may be, you may not want to renovate, even if you recognize you might be leaving money on the table."
He continues, "Then there’s the financial burden of renovating, assuming people are willing to undertake that. Clients often ask me, 'Should I renovate should I sell it? How far should I go in the renovation?' The first thing that I look at is the marketability of the unit and the expectations."
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High: Complex design, complicated engineering, lots of logistics (e.g. boom lifts, suspended scaffolds, etc.), dangerous working conditions.
Small: Changes to surfaces only (e.g. painting, tiling).
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For example, he says, a young couple looking at a place might want to do a full-blown renovation upon moving in or at some point early in their time in the apartment. On the other hand, a condo board with stringent rules could make renovation a nightmare, so a pre-sale sprucing-up could put the price at a premium.
To appeal to the broadest possible buying audience, Larry Friedman of the firm SDF Capital, which flips houses in Westchester County and Connecticut, recommends, "You need a lot of grays, whites, very neutral colors, and neutral upgrades, because you really want to attract the largest group of people to your home. In my opinion, doing a very nice ornate backsplash in granite may appeal to only 10 percent of the buying population. I’d recommend to stay broad and have very neutral upgrades." (Prior to his current job, Friedman worked as a broker in Manhattan)
Robin Shapiro of the brokerage Robin Shapiro Realty, who works primarily in the Rockaways, has similar advice. "Go for a generic look. Don't say, 'I only want white appliances. Do what the public wants. Everybody loves stainless steel appliances. Everybody loves white kitchens right now. Those are very popular."
She continues, "It's very hard to know what the public likes. I never suggest going crazy."
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Or go for that standout detail?
Lipman, who works with a lot of condos and co-ops in Manhattan, differs somewhat on this issue. He agrees that owners' more out-there modifications could make an apartment harder to sell, but says that he'd avoid some of the most well-trodden paths in design.
"If somebody pays for a renovated apartment, they might say, 'I don’t like it. Why did they do the Silestone countertops and the white kitchen? I want to redo it,'" he says. "Or it actually turns off some buyers. They might say, 'If I’m going to change it anyway, why would I pay for a full renovation?' It’s a double-edged sword when you renovate to a generic standard... I caution against a generic renovation for those precise reasons. It looks generic."
Instead he suggests, "stuff that is not completely out of the box, but does show some personalization and thought to details that people that are renovating to flip perhaps don’t consider, nor feel like they’re going to get value-add."
For example, he likes toe-kick drawers, added into the few inches between the bottoms of cabinets and the floor.
All of the seller's decisions, he says, should depend on "who you’re marketing to and what are your market expectations."
Renovations may or may not increase the sale price, but can certainly move an apartment faster
Each of the three cautioned against renovations for the sake of renovations, and particularly said not to expect that the cost put into fixing up a place will be directly reflected in an increase in the sale price. For an idea of what a renovation might do to the price, Friedman suggests looking at comparable listings in the area, and comparing the price histories (available on sites like StreetEasy) for those previously sold as-is, versus those sold with recent renovations.
"A lot of times it may not effect the market price, but it will make the place sell faster," he says.
In co-ops and condos, he says that kitchens, bathrooms, and floors matter most to buyers, and if they're worn, damaged, or dated, it's worth considering fixing them.
To gut-renovate or not to gut-renovate
A gleaming new renovation, our experts say, can justify a premium, whereas a place in obvious need of a gut renovation should be discounted. Single-family houses that have habitability or structural issues like a hole in the roof, a broken boiler, or a cracked foundation can be sold to investors for all cash, but regular buyers won't be able to get a mortgage unless the issues are addressed, Shapiro says.
When trying to figure out whether to raise or lower the price based on the status of the renovations, everything else is in a gray area, and you should make your decision in consultation with a professional (broker, renovation coach, shrink, life coach, rabbi—the possibilities are endless).
Finding the live-sell balance
When thinking about renovations, "You want to make smart investments for the future, but there’s also habitability factor," Lipman says. "Maybe you have a lot of kids, you cook a lot of smelly fish—you may not want an open plan. I caution people to not follow the latest trend but look at it and consider if it fits in with their lifestyle. If you live in a co-op on Fifth Avenue, you would have trouble selling an open plan. You’d have to discount it. On the flip-side, if you have a loft in Tribeca and you chop it up into six bedrooms, you’re not going to get" back what you put in.
Shapiro says she finds older sellers to be the most insistent that they should get a high price for a long-ago renovation. To try to get them to see through the fog of decades past when that pink bathroom was au courant, and to stop imagining it as part of a rainbow ending in a pot of gold, she puts it to them in the simplest possible terms:
"I say, 'I'm not buying your house. Would you buy your house in this condition today?'"
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