Value of an ageing renovation

"How many years does it take for the value to go to zero?"

Guess that depends on whether you're the buyer or the seller - LOL

it depends what condition it is in. if the renovation was very specific to the period of time or neutral/classic enough to present well.

i've seen ikea kitchens after 5 yrs that needed to go and krafmaide kitchens that looked brand new.

Here's one that goes to zero as soon as it was completed. http://streeteasy.com/nyc/sale/637545-condo-20-east-65th-street-lenox-hill-new-york

No doubt a beautiful space but a design aesthetic that's way too narrowly focused.

I agree with ab_11218. In my own case, we bought in 2003 from a couple who had bought and renovated in 2000. The reno was still fairly fresh but it was clear that it was not a quality job (call it B materials in the bathrooms, C materials in the kitchen and C+ workmanship throughout) and likely would not age well. We went into it assuming that by the time we sold we would take a discount for condition but were fine with that since the purchase price was compelling. At the nine year mark (vs. expectations of maybe 5 when we bought), the place is pretty tired and in my view would need quite a bit of work done. My guess is that it would still price at a slight premium to an estate sale because the previous reno did a few things that have lasted and there might be an option to do a more targeted reno (e.g. full kitchen but sprucing up as opposed to full redo of the bathrooms) instead of complete gut. Still, I would say that this sort of low end reno lost most of its value in 6 or 7 years.

This is very case specific but I suppose some useful generalities can be drawn. Some renos retain more value than others, such as those that include more permanent and useful updates that are not given to aging: for example, added and updated electrical, crown mouldings, reconfigured space to create walk-in closets or other logical and desireable reconfigurations.

Many renos, though, add limited value even the day they are completed--people just won't pay that much more for a reno'd space over an estate space; at least, they won't pay what the reno cost typically. This would apply to new applicances, paint, redone floors, light fixtures, and luxury finishes on baths and kitchens. These things help an apartment sell more quickly than an estate condition comparable apt, but that's about it if the reno is truly aged and shows it. Even if these things are in great and desirable condition, full costs will almost never be recovered.

Flawless, but taste specific (i.e., bad taste) renos are as worthless as an estate sale since a new owner will have to rip them out or be willing to live with something they hate--a buyer certainly won't pay more for such a reno. When we were looking, we'd see all these redone bathrooms in the most hideous green or blue tiles or kitchens with dopey vegatables on the backsplash tiles--things we hated and were below our preferred finish level (they were decidedly pedestrian and ugly). To us, these renos were worthless. But owner after owner tried to sell them as adding value. So those sales just never got to the offer stage because the ask was so off.

@uwsbeagle: wow. I'm debating my favorite: the lucite and gold bed versus the butterfly chair. That's quite an interior.

uwsbeagle, great find, love the hand job in the living room. Electric Cool Aide Acid Test meets flip this house!

All the furnishings are hideous but I especially like the mirrored ceiling. Look closely. You'll see it.

>and ascend in a private, one-of-a-kind hydraulic elevator which opens onto each floor.

Sounds expensive when it breaks.

falcogold, if the renovation was done with good materials and generally to your taste with no funky features, 25-30% of the cost of estimated current reno cost. Say $900 per sq ft for estate. $1200 per sq ft for fully finished brand new, probably $1100 per sq ft as renovation is a big headache for many and there are carrying costs during reno. Remember lot of people will pay a premium to move right in with some painiting and minor changes.

falco--too many variables

all but high quality infrastructure upgrades are of questionable value within 10 years max, even if the apt is barely lived in

and a sloppy family can turn a new, somewhat timeless reno into a shithole in 3 years

and beware of making changes to original layouts---more often than not macro design of original architect is best

there is the rare approach that holds value, but to execute one has to ignore any personal stlye impulses

It's a personal decision for the individual buyer. If the buyer finds the renovations good enough that they can move right in then it's probably an extra 5-20% over the estate condition based on the extent of the reno and the number of bathrooms. If on the other hand the buyer intends to rip most of the renovations out than to that buyer it's not worth anymore than the estate condition apartment.

The key is that the reno, no matter the age, makes the buyer consider the place move-in ready versus the estate condition or unrenovated unit. I agree with RealEstateNY. If the reno makes the buyer want to rip it out, it has no added value.

Sometimes a renovation has an advantage that is grandfathered in.... Like maybe single pane windows, or central air, or wet over dry -- things that the building or landmarks might not allow to happen today. The value can be in the existing permission rather than the specific taste of the renovation.