- Home Improvements and Renovations That Increase Value In New York
- Home Improvements Guaranteed to Add Value
- Home Improvements That May Add Value
- Home Improvements for Single-Family NYC Homes
- NYC Home Improvements to Avoid
- Home Improvement and Value - A Complicated Relationship
- Choose Thoughtful Home Improvements
- Work With an Expert
Add Value to Your New York City Home With These Improvements
FastExpert partner and top-producing New York City broker, Brett Ari Fischer, shares his expertise on how to add value to your New York City home. With a distinguished track record and extensive experience, you don’t want to miss these tips from The New York City Broker.
New York City has historically been one of the most lucrative housing markets, not just in the US but around the globe. Now other markets shine brighter on investors’ and buyers’ horizons, but the city that never sleeps is still the dream of many.
If you are lucky enough to have a home in NYC, you may have already benefited from a steady rise in its value, at least from a net worth perspective. If you want to give it that extra push and forcefully grow its value, you might be interested in knowing about certain home improvements that can help in that respect.
Home Improvements and Renovations That Increase Value In New York
Renovations in New York City are different from many other areas in the country because of the available housing inventory and the restrictions that come with it. Most of the housing units available in the city are apartments, which restricts residents mostly to interior home improvements since the exterior is the responsibility of the board overseeing the building.
There are two types of apartment buildings: co-ops and condos.
Co-ops make up about 75% of all residential buildings, further restricting a homeowner’s ability to make home improvements.
Co-op boards wield incredible power in NYC, and if they restrict you to certain contractors for improvements, you may have less financial wiggle room. A costly home improvement automatically reduces its ROI potential and, by extension, the value increase you may experience from it.
Even with these restrictions in place, there are some potent home improvements you can pursue in New York. We can divide the home improvements into three categories.
Home Improvements Guaranteed to Add Value
Cost-benefit analysis data is available for the following home improvements.
When making decisions related to your home improvement, consider your budget and end goal.
Kitchen remodeling can range from minor improvements to gut renovation, which involves major layout and plumbing changes and requires a permit in New York.
A cost and ROI (Return On Investment) comparison determined that some minor improvements in the kitchen can result in a decent increase in value. These improvements may include new or refreshed (refaced) cabinets, a new coat of paint, and new, practical kitchen tops. The ROI can range between 75% and 85%.
More significant changes like opting for customized cabinets, new appliances, and marble countertops may not offer as good an ROI (between 50% to 65%).
Even if the direct value increase is more significant. That’s partly because a buyer’s subjective taste may not match yours, so customization and costly cosmetic expenses may not translate as well in value as practical improvements might.
Bathroom remodeling is another one that pays off well in New York, and the ROI can range between 55% to 60%.
Like kitchen renovations, minor improvements offer the best ROI, and more lavish improvements like high-end bathtubs and expensive vanities might not bump the value up proportional to their cost.
Renovations like new light fixtures, tiles, radiant heat floors, large mirrors, and medicine cabinets may help you improve the value of your home without breaking the bank.
Some bathroom renovations may help you raise the value of your property if you can find the right buyer.
For example, if you replace the bathtub with a walk-in shower, making the bathroom more spacious, it may increase your home’s appeal significantly to some buyers that prefer the accessibility of a walk-in shower.
Adding a bathroom may also increase the value of your property, but due to the high cost of this project, the ROI may only be around 50%.
Home Improvements That May Add Value
Improvements for which there is minimal or relatively unreliable cost-benefit analysis data, but are endorsed by real estate professionals.
Opening up space in your home
Walls may offer privacy, but they can also make a small place look even smaller.
If you can tear down a wall or two (unless they are load-bearing) and make your home look more spacious, buyers may be willing to pay more for it.
Replace your light fixtures throughout the house and preferably opt for smart alternatives.
Additionally, smart devices like locks and cameras may also appeal to some buyers and slightly boost your home’s actual or perceived value.
A new coat of paint, especially lighter colors that augment the impact of natural light in your home (if you get any), can make it more appealing.
Even if it doesn’t increase the value of your home, it may prevent some buyers from asking for a significant discount on the sales price, which is possible if your home looks old and unkempt without the paint.
Embrace the History
Preserving and enhancing the value of historical features of your home, especially if you reside in a pre-war building, can significantly improve its appeal. This adds character to your place, and many potential buyers may pay extra for that.
Home Improvements for Single-Family NYC Homes
The following applies to the owners of brownstones/single-family homes in New York.
Enhance the Curb Appeal
Improve the curb appeal by repainting or at least power washing the exterior, adding some plants, and changing the front door.
The exterior of your home will be its first impression on potential buyers, and if it’s strong enough, it may enhance the value of the property.
Create a Backyard Oasis
A well-designed terrace or backyard can add a lot of value to your home, despite being highly costly improvements.
The idea of an open, green space within the privacy of your home attracts a lot of people, and they may not mind paying extra for that, especially if it’s rare in comparable properties.
NYC Home Improvements to Avoid
Improvements that may seem valuable to you, but do not add to the resale value of your home.
Luxury finish, additions, and equipment.
They may add value to a few high-end properties, but for most homes, a high-quality finish in the kitchen or bathroom, a luxurious bathtub, or top-of-the-line appliances may not add value to your home.
They may even put off cost-conscious buyers, who will automatically think that you have factored them in the asking price.
Expensive remodeling and gut renovations are not recommended unless you plan on staying in your home for years to benefit from a complete remodel. Otherwise, it may not add enough value to your home to justify its cost.
Home Improvement and Value – A Complicated Relationship
First things first, it’s important to differentiate an increase in value from realizing that value.
Let’s say you renovated your modest NYC apartment into something out of an architect’s fairy tale. You burned through a significant portion of your savings or took out a renovation loan/HELOC to fund this improvement.
What’s your Return on Investment (ROI)?
More importantly, how will you see any ROI without selling your home?
The simple answer is that you won’t.
Calculating an increase in value that stems from a particular home improvement is challenging for this very reason. You will get the most accurate answer if you get a value appraisal right before and after a home improvement.
A reasonably accurate assessment of the rise in value might require you to compare your appraised value to similar properties that lacked the improvement you made to your home. However, that’s only valid for home improvements you made right before putting your home on the market to sell.
The Immeasurable Value of Home Improvements
If you make an improvement and don’t sell your home for years, it will be difficult to discern the home value you have gained from the improvement/renovation and time-based appreciation. However, you get to live and experience home improvement, which might be considered an intangible increase in value that doesn’t translate into dollars or a quantifiable ROI.
I hope this explanation didn’t dissuade you from home improvements because some of them actually help you increase the value of your property in New York. The point of this explanation is to help you appreciate the complexity that exists between home improvements and value appreciation. Also, it helps you realize the value of intangibles.
If an improvement can help you sell your home faster, that’s value. If it attracts more buyers than comparable properties can and gives you a better chance to sell at the asking price, that’s an increase in value.
Choose Thoughtful Home Improvements
It’s important to remember that no amount of home renovations can help you sell your home beyond its fundamental value in the given market. Homes in attractive locations available for sale in a seller’s market may fetch a great price, even if you sell them as-is.
However, if you spend $100,000 renovating a $600,000 apartment, the buyer may not pick up the tab for that. They would rather buy a $600,000 apartment as-is (with similar fundamentals) and spend $25,000 on the improvements they actually need rather than pay $700,000 to you.
So if you are making improvements purely from the perspective of increasing your home’s value, keep them simple and low-cost, and stick to the low-effort, high-impact improvements to maximize the ROI on value. The deeper you go down the renovation rabbit hole, the more challenging it will be to salvage good value.
Work With an Expert
If you have questions about which home improvements will add value to your NYC home, consult a real estate agent. With extensive experience, a realtor will be able to help you decipher which renovations will best suit your home.
With all the questions that renovations bring, FastExpert makes it easy to find your perfect agent! Read reviews and check out ratings for real estate agents in your area.
Work with Brett Ari Fischer
As a top-producing NYC broker, Brett Ari Fischer can help with all of your New York City real estate questions. Message Brett Ari Fischer today!