Renovations in NYC can be intimidating, expensive, and take much longer than you might think – especially compared to the rest of the country. In this guide, we’ll tell you what you need to know before renovating in NYC and dive deeper into the essential factors to consider before purchasing a fixer-upper – ensuring both a smooth and successful closing as well as beautiful transformation.
Pre-Purchase Phase: Planning and Legal Considerations
Before you even consider putting in an offer on a property that you intend to renovate, you’ll need to figure a few things out, which we’ve covered in-depth below:
- Budget (including both the property and the renovation expenses)
- If the renovations you have in mind are allowed by the building
- Your timeline, including summer work rules
- How to balance personal taste with ROI
If you can’t make the above work with the property you have in mind, it’s in your best interest to keep looking. As a general rule, renovations in NYC will take longer, cost more, and be more complicated than they first seem. So, if you’re up against a tight deadline, aren’t sure if you can comfortably afford the cost, or your broker is advising you that the building will not allow you to do what you’d like to do…it’s best to move on to the next one.
Let’s take a deeper look at the aspects you’ll need to consider before making an offer on a NYC apartment you intend to renovate:
Figuring Out Your Budget
Renovations in NYC can be incredibly expensive, so it’s important to have a budget in place before beginning any work. In fact, it’s good to have a budget in place before putting in an offer – you don’t want to fall in love with the idea of a renovation if the reality will be out of reach.
It’s important to factor in all costs, including permits, contractor fees, and materials. You’ll also need at least a 10-15% contingency fund or buffer in place in case unexpected expenses arise.
If the property you’ve fallen in love with has post-purchase liquidity rules, you will want to consider that when putting together your budget. If you’re just squeaking by in terms of post-purchase liquidity and you submit paperwork to the board for an extensive renovation that would eat into your liquid assets, they may reconsider your approval.
Even more complex are the buildings that will start charging daily or weekly costs for your renovations. Typically in these buildings, they’ll give you a designated time period in which to complete your work. If you aren’t finished by the end of that time period, you’ll incur fees from the building either daily or weekly. These fees vary widely depending on the building, but the one thing they have in common is that they aren’t cheap.
Choosing your team carefully can greatly help preserve your budget, as the right real estate broker, designer, and contractors will make smart decisions on your behalf to save you money in the long run. With renovations in NYC, you get what you pay for.
Will Your Renovations Be Allowed?
Another aspect to consider when you’re looking at a NYC apartment that needs work is whether or not your dream renovation would even be allowed.
Before you can start renovations in NYC, you’ll need to submit an alteration agreement to the board. Alteration agreements outline your plans and let the building know what you’d like to do.
A great renovation team (which we’ll discuss in the ‘in-contract’ section of this article) will make sure there’s nothing in your alteration agreement that could mean a rejection, but it’s also not always an immediate yes – boards sometimes take awhile getting back to you, and may ask you to change aspects of your plan.
Common reasons that a board will reject plans include:
- Financial stability of the shareholder/owner (if the building doesn’t think you can afford it, they can reject your application)
- Structural or exterior changes (the building will not approve a renovation if it could change the character of the exterior or endanger other residents)
- Modifications that could harm the building’s infrastructure (Adding a washer/dryer just isn’t possible in many cases due to the age of the building’s pipes)
- Violation of building rules or restrictions (Some buildings may have a restriction on the number of walls that can be knocked down, where kitchens or bathrooms can be, the types of materials that can be used, etc.)
- Safety concerns (pre-war homes often have asbestos or lead paint that need to be taken into consideration – your alteration agreement needs to show you’ve accounted for those issues and have the budget to handle them)
If you work hard and communicate clearly with your team, you can submit your alteration agreement to the board at closing. You’ll also need approval from various city and state agencies, depending on the scope of your project.
It can take up to 4 months (or longer) for the building’s attorney, the board, and all government agencies to review and approve your plan, so the sooner you can turn it in the better.
Figuring Out Your Timeline
Summer Work Rules
Many NYC buildings have specific rules for construction timing, also known as summer work rules. Many New Yorkers leave the city and vacation between Memorial Day and Labor Day, meaning it’s convenient if loud construction can take place while they’re away. That means that many renovations in NYC have to take place during this period.
If your building has summer work rules, but your team thinks the renovation may take longer than the allowed time period, you’ll need to figure out what to do – either by omitting some of the work to shorten the timeline or breaking the work into segments that can be completed over several years.
Planning Your Schedule
While staying on schedule in a NYC renovation is possible, it’s often not the reality. You’ll need to plan for schedule overages and leave plenty of extra time for your project to complete – even with delays.
This is especially important if the apartment you are renovating will be your primary residence. You’ll need to have a backup living plan in place in the event that you can’t move in on time due to delays.
You’ll want to plan for:
- Contractor and designer availability (with summer work rules, contractors and designers can be hard to schedule between Memorial Day and Labor Day)
- Material lead times (especially in a post-Covid world)
- Permit processing time
- Seasonal considerations, including inclement weather
- Unexpected issues
- Communication issues
Extending the timeline can have very real and very significant costs, as daily/weekly fees accumulate quickly. If you have a tight window for completing your renovations, we recommend ordering all the materials and fixtures your team will need to complete the work ahead of your start time.
Design Suggestions from a Real Estate Broker Lens
In general, renovations in NYC will not result in a positive ROI – it’s one of the reasons that flipping simply isn’t done here. It’s just too expensive to make any money.
But that doesn’t mean you should throw caution to the wind – if you make bold design choices or over-improve, it could negatively impact how quickly your apartment sells, and for how much.
Even if it seems like it will be your forever home, it’s important to keep in mind that we never know what life will throw at us – circumstances change all the time.
We recommend avoiding fads and bold permanent fixtures, like orange cabinets, a red bathtub, or a hot pink refrigerator. These bold design choices may speak to someone other than you, but it’s also possible they will alienate a lot of potential buyers. Now, that doesn’t mean we want you to live in a boring, bland home! We encourage you to make bold choices with your furniture, paint, and art – which are all easily removed when it’s time to sell.
Additionally, there are some upgrades that can make your home stand out from the crowd. If you can add a washer/dryer or central air, you’ll enjoy living in the home much more – and so will future buyers. Adding functional and attractive storage is always a plus, as that is usually a sore spot for New Yorkers. And last but not least, any way you can open up or optimize the floor plan will help your home sell quicker.
If you’d like personalized advice about a property you have in mind, just reach out! We’re always available to draw upon our experience as agents to steer a buyer in the right direction.
Inspiration Photos
Whether you’re doing a large gut-renovation or a smaller renovation of a single room, you’ll want to gather and organize your inspiration photos. The clearer you are upfront about your vision, the less it will cost you in the long-run since you’ll avoid last-minute changes and re-dos of existing work.
In Contract Phase: Assembling Your Team
Once you’re in contract, it’s time to nail down everything so you can hit the ground running on closing day – including finalizing renovation plans, ordering materials/fixtures, applying for permits/licensing, finalizing your budget, double-checking your timeline, and more.
Much of this work will fall on your renovation team after you hire them – which is why it’s so important to find a great one.
Assemble Your Renovation Team
There are a number of positions to fill when it comes to your renovation team. At its most basic form, your team will include an architect, an interior designer, and a general contractor, but there are many specialists that you may also need depending on your renovation.
Finding the right team for your renovations is crucial. It’s important to do your research and find individuals or firms with a good reputation and a track record of successful projects. Keeping to your timeline and budget are essential skills each member of your team must showcase.
You’ll also want to get multiple quotes (we recommend 3-5) – no matter how well-recommended someone is, it’s always a good idea to shop around.
While your real estate broker can provide valuable connections, and the recommendations of a trusted friend or family member are also good resources, an invaluable and often overlooked source of recommendations is the building superintendent or resident manager.
Supers/Resident Managers keep an eye on the building and any work being done in it to protect the residents’ interests. This means they know who does great work, who is familiar with the inner workings of the building, and who finishes projects on time. Plus, if you work with trusted & familiar vendors, the board may approve your renovations more quickly!
Make sure to get multiple bids on your project and ask for client references before selecting a contractor. You don’t want to find out that your contractor’s work is subpar during your renovations.
It’s also important to have a detailed contract in place before any work begins – that way everyone is on the same page about the project’s scope and the work can go smoothly.
Avoid Over-Improving
It’s easy to walk into a space and imagine a grand renovation to make it completely ‘yours’, but it’s equally as important to remember resale value. If this will be your forever home and you are okay with potentially taking a loss on the renovations once you pass away or if you should ever need to sell it, dream as big as you’d like! But if you’re thinking of holding the property for a number of years and then selling…that’s a different story.
During your search, your real estate agent can give you an idea of what high-end renovated homes in the building/neighborhood are going for. That can help determine how much money you’ll want to budget for a renovation.
Post-Closing Phase: Executing the Renovation
Open and Honest Communication
Good communication is key when beginning renovations in an NYC apartment. It’s important to keep lines of communication open with every member of your team. This will enable you to address any concerns that arise and take care of small issues before they snowball into big ones. It’s also important to communicate with your neighbors and building management to ensure that the renovations are not disrupting anyone else’s living situation.
Start Swinging That Sledgehammer!
In conclusion, renovations in an NYC apartment can be challenging, but with the right preparation, they can be wildly successful. If you plan ahead, submit your paperwork early, set a timeline and budget, an put together an excellent team, you can ensure that your renovations run smoothly and efficiently. Good luck!
If you’ve read this far and still have questions, please don’t hesitate to reach out. We’d be happy to continue the conversation with you, no strings attached.
