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How Much Will Your Home Renovation Cost? (Hint: More Than You Think)

By Amy Zimmer | August 18, 2015 6:20pm
 The before and after photos of one of Pepper Binkley's bathrooms, which she renovated using a contractor she found through Sweeten.com, whose blog documented the renovation of both of Binkley's bathrooms.
The before and after photos of one of Pepper Binkley's bathrooms, which she renovated using a contractor she found through Sweeten.com, whose blog documented the renovation of both of Binkley's bathrooms.
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MANHATTAN — After living in her Hudson Heights pre-war apartment for eight years, Pepper Binkley finally decided to re-do her two bathrooms, getting bids from five contractors.

She was shocked at how high the quotes were — and how wildly far apart they were in price.

The low end of the bids, which were just for labor and did not include fixtures or tiles, came in about $20,000, while the high end was above $40,000.

"I thought the whole cost was going to be about $10,000 to $15,000 for labor for both bathrooms," said Binkley, an actress, who ended up scaling down her project, deciding to put more money into nice fixtures rather than moving any plumbing around.

It's not uncommon for homeowners to receive multiple bids from a range of contractors, all of which vary greatly in price as well as scope, experts said. Prices in the industry seem to be running especially high these days as renovation permits have spiked and contractors are in high demand.

Binkley went with a contractor on the lower end of the bidding spectrum, who was just starting his own business and was "hungry." She found him through Sweeten, a New York City-focused online matchmaking service for homeowners and licensed contractors. Even though there was a "fair amount he didn't know," Binkley said "he was responsible and responsive and was around the project, so when issues came up, he was around," said Binkley, who was happy with the results.

Here's what you need to know if you're planning a project:

1. Kitchen renovations start at $30,000; bathrooms start at $20,000.

For a kitchen renovation that's "done right," including all appliances, expect it to cost at least $30,000, according to Bolster, a startup that aims to transform homeowners' renovation experience by guaranteeing their projects never go over budget.

Bathrooms will likely start at $20,000, with new fixtures.

The starting cost of a basic kitchen and bathroom renovation that includes some electrical and plumbing replacement with basic carpentry and finishes — and does not include relocating any water lines or outlets — is $60,000. 

In Manhattan, the average project ran about $117,595, with kitchens the most popular type of project by volume, according to a new analysis of Bolster's projects from the third quarter.

Brooklyn projects averaged roughly $80,000, with gut renovations most popular.

Guts were also most popular in Queens and the Bronx, where average prices were about $246,000 and $225,000 respectively.

The quality of materials and workmanship can affect the price tremendously and mean the difference between a job that costs $100 a square foot versus $300 per square foot, said Bolster's founder and CEO Fraser Patterson.

2. Contractors are busy — and can charge accordingly.

Renovation spending is expected to reach a high in the third quarter of this year, surpassing its previous record of 2007, according to the Residential Remodeling Index, a national consumer retail index monitored by Harvard's Joint Center for Housing.

 Fraser Patterson, founder and CEO of Bolster.
Fraser Patterson, founder and CEO of Bolster.
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"This means increasingly more demand for contractors which can, in itself, drive up prices," Patterson said.

The city's renovation landscape is busiest in Brooklyn with roughly 3,790 permits for alterations filed between June 2014 through July 2015, up more than 14 percent from the year before, according to a DNAinfo analysis of Department of Buildings data.

Manhattan saw 3,530 permits filed, up nearly 10 percent from the year before, and Queens saw 3,110 permits filed, up 7 percent.

Though the Bronx trailed in overall permits, with 1,140, the borough's jump was nearly 14 percent from the year before.

(Staten Island's 540 permits represented a slight dip from the year before.)

3. More work brings out more "amateurs."

The high demand draws inexperienced contractors who sometimes offer low prices — but buyer beware, sometimes you get what you pay for, Patterson said.

Without the necessary overhead, like licenses, insurances or training, fly-by-night contractors could provide dangerously cheap bids and undercut the professionals, he warned.

Making matters worse, these contractors will sometimes take the money and run, leaving the homeowner high and dry. With no known reputation to uphold, new to the scene contractors can be less reliable than ones who've been in the business for a while.

Experts say you should always check with the city's Department of Consumer Affairs to ensure your contractor is licensed in good standing, and make sure you check their insurance policy to make sure it's the right one for your project.

4. If you don't present your contractors with the same scope of work, it's hard to compare bids.

Contractors are often not bidding on the same set of tasks, which makes it hard for a homeowner to understand what they might be getting or paying for.

"[Contractors] each interpret and quote differently omitting or obfuscating various things, either by virtue of the way they 'build' an estimate or deliberately to confuse the homeowner," Patterson explained.

He added that consumers typically don't have the technical expertise to tell the difference between the information and pricing the contractors are giving them.

5. The best way to get an estimate is to have your contractor do a thorough walkthrough.

When figuring out how much their renovation project will cost, a lot of homeowners will ask their friends, real estate brokers or architects.

"Those are the wrong people," said Aaron Borenstein, a contractor with more than 14 years experience who works for Bolster.

"The right way to figure out how much it is going to cost is to allow your contractor to come in and do their due diligence and iron out unforeseen issues. The more discovery pre-construction, the more control over the costs while you're building," Borenstein said.

There are a lot of factors to consider in New York City, he added, like whether you live in an elevator building or walkup, whether there's parking nearby, whether there's space to store materials in the apartment while work is happening, or whether construction work will be restricted to certain hours.

There are also questions about who will be doing the work.

"Are you hiring a man and his son to do everything? Maybe it will take six months instead of two," said Borenstein.

"There are a lot of construction firms out there that lowball projects and then hit the homeowners with additional work orders," he said, adding, "The prices when they're higher, they're just realistic."