Wednesday, March 6, 2019

Do the Super Wealthy Renovate or Rebuild?

The vast majority of 'extreme home makeovers' we see are those on HGTV and the like and mostly more affordable. But gut renovations happen at all price levels, including multi-million dollar homes.

Until recently, most people have been more prone to tearing down an old house and building a brand new one in its place, especially in areas where pricing has soared and doing so is fully justified. Often this is cheaper. But there are some older houses in prime areas that pose historic or architectural significance and doing a gut renovation is the only solution. All renovation is expensive, especially if it is done correctly and not merely a cosmetic re-do. Structural renovations, especially in tight spaces in urban areas can be extremely costly, and often the structural and mechanical aspects of the renovation are not clearly visible. They may often be the most important aspect of the renovation.

The first step any prospective high-end renovator should do is consult their real estate agent to determine the differential between what the property costs to buy and what it could be worth fully renovated. Some buyers of very expensive homes don't care if they lose money upon re-sale, but they are in the minority. A client of ours recently gut-renovated a massive property with no budget (the garden alone cost $10 million) and stated boldly: "I am rich, I am not going to live forever, I love this property, it's my home and I don't care if it sells for 50 cents on the dollar!"

The next step would be to hire a team: an architect, builder and engineer are a good start. A landscaper and interior designer are always meaningful. Getting a comprehensive understanding of current conditions and the environment/land that the property is built on is critical. Understanding costs is equally important, if cost matters. Most older homes require massive infrastructure changes to meet the demands of modern living. There are very few for which a cosmetic renovation alone works. Most renovators of expensive older homes have told me that skimping is usually inevitably more costly and its always wiser to do things 100% thoroughly from A-Z.

Everything you put into a high-priced renovation has varying degrees of cost: some windows for instance can cost triple the cost of others. A quality sink faucet can cost anywhere from $500 to well over $5,000. Choices matter. And often those choices have to refer back to end valuation to be justified. There is nothing worse than doing an expensive renovation that appears cheap or looks like parts were skimped, as tempting as that may be. When evaluating an older' properties re-design its always important to retain the aspects that make that property special while adapting the place to a contemporary lifestyle. Those who destroy (good) architectural history are better off building from scratch elsewhere.

A beautifully renovated house requires a beautifully landscaped environment: too often we see poorly executed landscaping because people forget just how much landscaping can cost and they have no budget left by the time they are finished with the house/apartment...and all the additional costs that are inevitable. Older homes are prone to delivering 'surprises.'

While we love new construction, we have to say that personally nothing compares to a magnificently renovated home that has it's architectural beauty preserved. It's also important to note that most very high end properties are viewed as dated and requiring of a cosmetic renovation after about 6-7 years. Don't forget: the rich are different!

With their Multi-Cultural Background, over 35 years of combined experience selling Real Estate and because they are Licensed in New Jersey, New York and California, Rahul, Smitha and their team can offer global reach. They have lots of experience representing a diverse group of clients, from Local New Jersey Buyers & Sellers to Relocation and International/Foreign Buyers, Sellers and Investors. 

Rahul and Smitha are exceptionally well-respected Realtors in the industry with high ethical standards and GLOWING REVIEWS. Their team offers a high level of expertise, innovative technology and cutting-edge real estate marketing and sales solutions.  They specialize in Morris, Somerset, Essex and Union counties. | |