A home buyer may find a fixer-upper in New York City to be more affordable than a newly renovated property. But renovating it could turn out to be an expensive nightmare if you don’t know what to expect and you don’t know what you’re doing. There’s a lot to consider, especially when you’re looking for an NYC fixer-upper.
Here are five questions you need to ask when buying a home in NYC that you intend to renovate.
1. What are the building’s renovation requirements?
Do your homework in advance. Know the building’s rules or policies on renovations.
There are different renovation requirements for different types of properties in NYC.
For a single-family home or a townhouse, depending on the scope of work, you may need to secure approval from the Department of Buildings before starting any work.
For condos and co-ops, you need to have your renovation plans approved by the building’s board. Know the building’s renovation policies (like insurance requirements and time that work can be done) before getting started on an application.
For co-ops, ask your real estate agent to obtain a copy of the building’s alteration agreements, which includes the necessary steps to make any changes.
2. Who are the professionals you need to hire?
A successful renovation is dependent on having the best professionals working on your project.
Make sure you have the right team by your side when buying and transforming a fixer-upper. You’ll need a real estate agent, a lawyer specializing in real estate, a general contractor, and, if a gut renovation or moving walls is included in your plans, an architect.
Getting estimates from at least three general contractors is wise. List down your questions, call references from their previous jobs, and request to look at their past work.
It can’t be emphasized enough that it’s crucial that you only hire professionals who come highly recommended.
3. What’s the condition of your home?
Your home’s structural condition and the state of its plumbing and electrical systems will determine the extent of renovation needed to fix up the property. A home inspection gives you a good idea of the condition of your home.
Before the renovation starts, decide what are your must-haves and what areas you’re ready to compromise. To cut costs significantly, find a fixer-upper that already has the number of bedrooms and bathrooms that you need. If you’re going to gut the place anyway, don’t focus on minor details like window colors or cabinet fixtures.
4. What’s your renovation budget?
More often than not, renovating a home will cost more than you initially budgeted for. Have a realistic budget, but also, be prepared to go over it, as unforeseen or hidden costs may crop up.
Decide early on how much and how you want to pay for your renovation. Will you be taking out a loan? Consider a loan that will allow you to finance your remodel as part of your mortgage application in one process, instead of undergoing two separate processes.
After buying the fixer-upper, how much of your budget will be left for the renovation? A full-home remodel in NYC would cost starting at $100 to $200 per square foot.
Other factors that will affect your renovation cost include current home conditions, moving plumbing and electrical systems, and choice of materials.
5. What’s the project timeline?
Every homeowner has a different timeline for buying and remodeling a fixer-upper.
Six to nine months is a good starting point for finding and closing on the right home. Don’t forget to include timing of any licenses and permits you may need, along with mortgage and board approvals. Sometimes they take much longer than expected.
There would be an overlap between your home search and renovation schedule, but the majority of renovation-related work that happens before closing on the property is about preparation.
With a massive renovation project, delays can’t be avoided. So be prepared to go way over your allotted time.
As a home buyer, you need to do thorough research about renovation costs and requirements, then find the best team to carry out a successful transformation of your fixer-upper. When you’ve done all that, you’re a step closer to owning your dream home in NYC.