How much does it cost to remodel a condo?
As I've been writing about buying and renovating apartments and condominiums, I think it's about time that I go over how much it costs to do the remodel itself. It'll be pretty much impossible to know whether you can turn a profit on a condo or apartment remodel if you can't ballpark how much it'll actually cost.
Generally, and assuming you're completely replacing everything: $100/sf.
I know, that's a LOT. Let me go into some more detail and add some experiences from my own "gut and replace" remodel of a 1000 sf. condo in Seattle. I've tried to break this down into three guiding questions that you can use to make a guestimate on cost, but if you want more tangible numbers, there's a detailed calculator at the end that will help. Keep in mind that I am assuming mid-to-high end finishes throughout here, but if you go with the cheap stuff you can probably save a significant amount... at the expense of final quality.
Condominium remodel cost question 1: What are you completely replacing?
First of all, if you plan on keeping floors, cabinets, appliances, tile and other expensive line items, you'll save a significant amount over the aforementioned $100/sf.. Before you decide to completely remove and replacing everything, I'd try to approach it from a "what can I live with keeping" perspective.
For instance, in my remodel I had some 8-10 year old stainless steel appliances that were starting to show their age. I kept them though, and saved $2-3k. In the end it didn't really affect the final product, although shiny, perfect new appliances would have been nice.
As you can see below, my condo was so old (built in the '60's) that it needed pretty much everything replaced besides those appliances. I bought it intentionally that way, knowing I'd need to do a lot of work. I actually wanted to save the cabinets and reuse them but they were so old they didn't even have rollers on the drawers.
My decision making was guided by whether or not keeping an item would significantly affect the quality of the finished product. In my case that meant everything went out the door (including the walk in tub in the bathroom, which was not cheap to remove), but if you can find a place that has some salvageable pieces, you can probably save $10-$20/sf on your total remodel cost.
Condo renovation cost question 2: How much are you altering?
As you can see in the image above, my condo needed some work. Two of the most important items for me to change also ended up being the most expensive: popcorn ceiling removal and the wall between the kitchen and living room.
I've already complained about the popcorn ceiling removal. If I were to pinpoint a single flaw in my renovation, it was choosing a place that needed $7000 of work done before we even got started. That being said, I'm glad I chose to remove it because it would have ruined the finished product.
However hard it was to spend the money on the popcorn ceiling, I think you'll agree that removing the wall was a REALLY good idea. I'll admit I was initially against removing it because of the cost, but thankfully I chose to go for it ended up with a much more open and inviting space. You'll also notice the lighter tones, which make the open space feel even bigger than it actually is.
I would have saved $5-10k by keeping the wall between the kitchen and the living room, but I'm glad I didn't. If you want more info on condo kitchen kitchen remodel costs, make sure to look at my detailed post on the subject.
Condo remodel cost question 3: How much are you doing yourself?
In my 1000 sq. ft. condo remodel, the architect, contractor, and labor each cost around $10/sq.ft. In total, our 1000 sq. ft. remodel was $100k, and $30k of that was for fees and labor.
To me, it was money well spent. As I alluded to before, we don't have the time or the experience to do the work ourselves, so it was the only option. But, if you can do all of the work yourself you could easily do a super high quality remodel on a condo for $50-70/sq. ft. Provided you do a good job, that is.
Condo remodel question 4: How are you going to pay for your remodel?
Financing a renovation can be tricky, but luckily there are a lot of options. Many people choose to finance their renovation out of pocket, which is what I did. This is actually easier than it may sound if you are able to save up a large chunk of the cost before the remodel, and then continue contributing to the remodel fund as you go through the process. Just make sure to anticipate higher costs than you are budgeting for... that's a fundamental fact of remodeling.
Many people choose to borrow their remodel fund through a cash out refinance or HELOC. Many people also consider personal loans, which can be a much easier option despite higher rates. Lending Tree offers all of these options and is a great place to comparison shop if you need a loan for your remodel.
The last option for financing your condo remodel is through an equity sale. Point and Unison are two companies that both allow you to sell a portion of your equity in your home, or your new home purchase. This is a fantastic alternative to HELOCs and cash out refinancing, but it is also more complicated.
Make sure to keep track of your investment and know your tax deductions after renovating your condo
Even when you're done with your condo remodel, you're not quite finished. Make sure to keep track of your costs for tax purposes and keep an eye on your properties market value.
Keep track of your investment
As you are likely to put a large amount of money into your condo remodel, I highly advise you find a way to keep track of your remodel cost as well as the value of your condo over time. I use the free tools at Personal Capital to do both - they have a Zillow z-estimate connector to keep the valuation of your condo handy. Simply sign up for Personal Capital, then enter your home as a new asset. Then enter your mortgage as a separate account and you will see what I see in the image above.
Why do you want to track all of this? It's fairly simple - if you put too much money into a home, you can easily end up underwater. Make sure you know where you stand.
Know your tax deductions
If you are planning on renting out your condo after renovation, make sure you keep track of every single expense, particularly your contractors bills if you have them. You can depreciate the cost of your condo remodel over the next 27.5 years, and significantly reduce any tax you may owe due to your rental income. Depreciating the cost of our renovation gives us about $4,000 a year in rental income that we don't have to worry about paying income taxes on ($100k/27=$4k~).
Condo remodel cost calculator: Figure it out for yourself
Enough of me, try estimating some costs on your own below (scroll to the bottom). Keep in mind that this is only an estimator, so your own mileage can vary wildly. Also, when costs do vary they have this weird tendency to vary UP, so plan for that as well.
Caveats aside, the calculator should be fairly easy to use. Most of the inputs are fine to keep as defaults, so you can just change the square footage, quality of finishes, and remove the individual items that you won't be needing or using.
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