Buying a fixer-upper: a more affordable path to owning your dream home

In 2021, New York City real estate market came back stronger than ever. The growing demand from potential homebuyers and the declining housing inventory make the process of buying your first home even more challenging. Buying a fixer-upper is a great solution for homeowners who are ready to spend extra time renovating the unit in exchange for a desired square footage and location at a more affordable price point. 

The process of renovating a home can be challenging but rewarding. There are multiple benefits to buying a fixer-upper, including a lower price and the opportunity to have a newly renovated apartment without bidding wars. On the flip side, renovations can be costly and time-consuming. It is up to you to determine whether the property is worth the extra time and expenses. We'll be happy to guide you through the process.

The first step in the journey of buying a fixer-upper is to determine your budget and find the dream space you want to renovate. A home renovation budget will help you to decide whether you will use your savings or apply for a mortgage. We can use the co-op unit 3A at 345 West 70th Street in Manhattan as an example. The 3-bedroom, 1-bathroom apartment offers plenty of space for potential changes and upgrades. 

Keep in mind that most co-op buildings require shareholders to sign an alteration agreement before starting any large-scale renovations. When shareholder signs the alteration agreement, they promise to renovate the unit according to law and not damage the building. Once you obtain the alteration agreement, you can share it with potential contractors.

The next step is to decide what changes you want to make to the unit and find a contractor. As a homeowner, you can work with a full-service design-build construction company that will take care of the whole process for you. But if you prefer to oversee the project yourself, it is best to hire a labor-only contractor. The co-op unit at 345 West 70th Street might require some changes to the layout. For example, the homeowner might explore adding a second bathroom and merging living and dining rooms. 

Overall, investing in a fixer-upper brings more New Yorkers closer to owning their dream home, especially in the time of affordability crisis. If you are on the hunt for a home to renovate, make sure you do your research to find the right unit, calculate your expenses and find a team of professionals to help you complete the makeover. 

Resources:

“Renovating A Fixer-Upper In NYC: What You Need To Know,” (Gallery Kitchen & Bath)

“Everything you should know about making an offer on a fixer upper,” (Localize, 2020)

“Buying a Fixer-Upper to Renovate in NYC? 5 Things You Must Know,” by StreetEasy Team (StreetEasy, 2019)

“Here's How to Find the Perfect NYC Fixer-Upper on StreetEasy,” by Todd Stone (StreetEasy, 2019)

“Alteration Agreements,” by Rosie Powers (Cooperator News New York, 2012)