A pal in Queens N.Y. is planning to sell his small house which has a dated kitchen and dining area, tired appliances, etc…He is convinced that they should do a total redo of the kitch and dining area before selling, in order to improve marketability and increase his profit on sale. Area homes go for $350k – $400k.You guys & gals agree with that approach or mine: I say they prob will not recover the costs of redo, cause tastes differ, buyer likely would prefer to do own redo, etc. What say you all??
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How strong is the real estate market there? If it is good I wouldn't bother. There is a lot to be said for a kitchen renov. if the market is not strong. By all means he should invest in good paint and very clean carpets (nice cheap eyecandy)
I read an article on some current research on the gains from remodeling. If I remembered correctly it showed that in most case remodeling for resale was a losing proposition.
BTW, I have been data. Call a couple of local real estate agents that heavily work that area. Get their opinion. They know what the shape of the kitches are in for the other houses that are competitors to this one. And what the going rate is for "old kitchens" vs "new kitchens".
It varies from state to state, but he is likely to recover someting like 85-90% (max!) on the remodel. Added to that, you never know a buyer's taste. Odds favor leaving it as is. There is actually a website that gives you the % you're likely te recoup on a state-by-state basis; if I find it, I'll come back w/ a link.
I'd say it all depends what the existing kitchen looks like.
No one's gonna pay $400K for a fixer upper.
And.....which is more important...selling price...or time it takes to sell.
New usually sells faster.......as there's a bigger market for turn-key.
I'm sure a local realestate agent would have some area specific answers for them.
Jeff
..and...the returns on remodeling are an average..some higher..some lower. I recently finished trimming the shell of an addition the customer just had built. Nice, big two story addition for media room downstairs and den up stairs.
The guy had a near perfect house to begin with......but wanted room for a pool table..and went from there.
About a month after I had finished.....his company gave him the choice of a layoff or move out of state. He put the house on the market...sold it within a month...and told me he sold it for enough to pay off the mortgage.....and pay off the loans he took for the addition/remodeling......and have a coupla more bucks in his pockets.
He actually made money on his remodel....and it didn't include the usual "good investments".....of kitchens and/or baths.
..............Al-ways look on......the bright......side of life...........
.......whistle.....whistle.......whistle........
Edited 11/12/2002 6:22:39 PM ET by Jeff J. Buck
Jeff, this house is not a "fixer upper", it just has a rather tired kitchen, The rest of the house is in good shape, finished basement, comparable to the neighboring properties, at least from the outside... The market in the area is Hot (tho' may be cooling, due to the economy). Listings in Queens area seem to sell within a month... If listed at $400k, say, if it were me, I wouldn't mind negotiating down by $10-25k with an interested buyer, leave the kitchen as is, take the $ and leave the redo problems, the decisions, the choices, the bidding, etc etc to the new owner. It woudl be espcially easy to do, if the cost basis is, say, $150k or so...And sure, local realtors should offer their ideas. Thanks for the comments. I'll pass them on to the owner to chew on...Paul
If it's a hot market, just freshen the place up a bit. Take out the trash, scrub down and paint the ceilings/walls/trim and maybe even the cabinets.
Eye candy.
Overall he came out OK, but was that due to appreciation on the original house which offset the losses due to the cost of the addition? For example
original house mortgage 200K
addition 100K
sale price 310K
Guy thinks he made 10K on the deal, but in reality his original house had appreciated to 250K, and his net loss by doing the addition was really 40K. Your guy and the above case were lucky because they had appreciation to cover their arses. But in many cases, a $20K improvement with only a 50% return, that is only utilized a couple of years ends up costing big bucks per year. How many people would want an extra bath that cost them $5K a year for two years?
A kitchen is complicated. We shied away from houses with new kitchens because we didn't want to buy someone elses taste. As a recent buyer, I would say that it is imperitive to do those improvements which otherwise would raise red flags. I saw places where a few hundred $$ of simple repairs and some paint would have really improved the place. I also saw some horrible renovation work where the owner put in stuff that any likely buyer would remove on day 2. Best example, in a neighborhhod of $225K bungallows, a guy who is a chef puts in this huge elaborate first floor kitchen, and knocks down walls to make this huge great room, plus it extended out to block the driveway and the garage. reno cost 60K, they sold for under 240K, and reno wasn't even done when it went on the market. Guy didn't lose money, but that sure ate into the $100K appreciation he had on the property.
We are discussing a kitchen reno right now, with a possible smaller (8x6) single story addition to square out the house/make a breakfast nook. Our first concern is not expanding the house too much as we are the big place as is. We anticipate being here another 8 years at least, so any custom work we do specific to our needs that isn't recoverable will be amoritized over that period. But mostly we are looking to do improvements which are acceptable to us but also not objectionable to others. My next door neighbor just painted her house a deep purple-marroon with a dark brown trim. I sure hope she likes the colors because it is going to take a lot of paint to get her house back to a happy color.
'deep purple maroon' that wouldn't be the same cranberry color stuff that seems fairly popular on older homes the last few years would it?
There are 3 houses that I know of in my area that have the same color for the main siding and all three had real serious paint peeling within the following two years. Came off in sheets. Let the thunder crack and the waves roar.
We're going on.
When we were looking at houses, one of the nicest houses we saw, inside, had olive drab green vinyl siding on it. Never really considered that house because of the expense of replacing the siding.
Don't want to live in a house that looks like an oversized army tent. Seen enough of that.
Oh, brand new house, the owner/builder liked it. I think he ended up getting about 5K less then the other houses in the development, and took a few months more to sell.
Kitchens are the same way. Some houses I've looked at the new kitchen was incredible, nearly worth buying the house for. Others????? But, either kitchen would have been a draw for some and a turn-off for others. I've had people dislike my nice oak kitchen. Just don't like the look of wood. They'd paint the cabinets if it was their house.
Paulz
Consumer reports just did a feature on what you get back from your investment, check it out, maybe thats where Hartman got the info from.
I dont know if I would ask a realtor what they thought, it will make it easier to sell if you redo the kitchen but you may not get your money back. Not slamin realtors just an observation.
All things being relative, 350k might not even get you a decent fixer-upper in San Fran.
Doug
location you got... whadda you need a remodeled kitchen for ?... paint it up... cut out some pictures of a remodeled kitchen and leave 'em on the counter to show what you were thinking of doing if you didn't have to sell..
ie: sell 'em the sizzle & keep the steak for yourselves...
Mike Smith Rhode Island : Design / Build / Repair / Restore
I remember my mom sold the house after my folks divorced. She had done the kitchen over about a year before. Before the papers were even signed the couple was taking everything OUT! I am not kidding. My mom just cried. All the hard work she had done. Your taste is going to be different than somone elses. I wouldn't redo it. I still am floored when you guys post kitchen redo's costin $100,000 plus. Tamara
You might also want to think that the last thing a serious restorer wants to see is some flim flam remodel.
This may not be the case, but I have watched beautiful homes destroyed by remodels. On a average, you will see a home "fixed" every twenty years, what I would like to buy is a home that hasn't been frigged with.
Yep, I agree. I just built a kitchen outta rustic hickory. Talking to some people they said that a lot of folks wont like that and it will affect the resale. I figure itlike this. Most people will tear aout any kitchen /bath/flooring ect after buying the house. To make their own and fit their personality. But they look for cleaniness and up keep when purchasing a house. If everything is kept up it will give them a warm feeling about the things they cant see, like plumbing/electrical ect. It gives them the feeling that the HO took pride in his casa
At Darkworks cut to size made to burn......Putty isnt a option
How old is it? 400k in the area? How's the counter top? Is the kitchen Horrible? If its not a 1950s kitchen Leave it.
Men do not quit playing because they grow old; they grow old because they quit playing!
Realtor suggestion is a great one. They'll be able to tell him what, if anything, should be done.
Things that come to my mind. Give him the FHB Kitchen and Bath issue and have him read the cheap $1700 remodel article. Maybe new counters (laminate), sink and faucet. New pulls? Paint. And make sure that it is organized and spit-polished. Clean and shiney go a long way.
Shelley in NM