{"id":174585,"date":"2024-06-26T13:27:21","date_gmt":"2024-06-26T19:27:21","guid":{"rendered":"https:\/\/www.biggerpockets.com\/blog\/?p=174585"},"modified":"2024-08-26T04:02:12","modified_gmt":"2024-08-26T10:02:12","slug":"how-to-calculate-repair-rehab-and-renovation-costs-for-any-project","status":"publish","type":"post","link":"https:\/\/www.biggerpockets.com\/blog\/how-to-calculate-repair-rehab-and-renovation-costs-for-any-project","title":{"rendered":"How to Figure Out Repair, Rehab, and Renovation Costs on Any Project"},"content":{"rendered":"\n\n      <iframe loading=\"lazy\" frameborder=\"0\" height=\"200\" scrolling=\"no\" src=\"https:\/\/playlist.megaphone.fm\/?e=BIGPOC6691051036\" width=\"100%\"><\/iframe>\r\n  \n\n\n\n\n<p><span data-preserver-spaces=\"true\">The question is <\/span><span data-preserver-spaces=\"true\">asked all the time<\/span><span data-preserver-spaces=\"true\">: How can I estimate average <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/how-to-estimate-rehab-costs\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">rehab costs<\/span><\/a><span data-preserver-spaces=\"true\">? Well, there is no average rehab cost because there is no average rehab.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Some properties will need major structural modifications; others just a lipstick approach. Some may have a recently remodeled kitchen, and others may have a 1950s galley kitchen.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But since this is such a popular topic, let\u2019s see if we can try to make it at least (a little) feasible for a newbie to the construction world.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Ways to Go About It<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">First, there are several ways to get a price range for needed work on a property:<\/span><\/p>\n\n\n\n<ol class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">Have a general contractor walk the property.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Have a home inspector give you a report and use that to put together a budget.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Develop a square footage cost per square foot for the whole project.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Develop a square footage cost for each trade, like tile and drywall.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Use an online calculator.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">Ask friends for help\u2014ones <\/span><span data-preserver-spaces=\"true\">that have had a recent<\/span><span data-preserver-spaces=\"true\"> remodel or may have some <\/span><span data-preserver-spaces=\"true\">kind of<\/span><span data-preserver-spaces=\"true\"> construction experience.<\/span><\/li>\n<\/ol>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Who to Work With<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">Of course, the best and <\/span><span data-preserver-spaces=\"true\">by far the<\/span><span data-preserver-spaces=\"true\"> safest way, in the beginning, <\/span><span data-preserver-spaces=\"true\">would be<\/span><span data-preserver-spaces=\"true\"> to use a veteran <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/contractor-questions\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">general contractor<\/span><\/a><span data-preserver-spaces=\"true\"> (GC) to walk the property and throw a rough number at the necessary <\/span><span data-preserver-spaces=\"true\">and\/or<\/span><span data-preserver-spaces=\"true\"> desired repairs or improvements.<\/span> <span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> is certainly possible, but most contractors will expect to <\/span><span data-preserver-spaces=\"true\">be paid<\/span><span data-preserver-spaces=\"true\">, and they <\/span><span data-preserver-spaces=\"true\">cannot always<\/span><span data-preserver-spaces=\"true\"> fit such a small task (for them) into their schedule because you have a deadline due to escrow.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">And note<\/span><span data-preserver-spaces=\"true\"> that I used the term \u201cveteran\u201d in describing this GC. It does you no good to use a new or young contractor fresh out of the exam room. You need someone with decades of experience<\/span><span data-preserver-spaces=\"true\">, who can throw out<\/span><span data-preserver-spaces=\"true\"> a semi-accurate price just by looking at a property in an hour. They must have done dozens or hundreds of projects to be able to <\/span><span data-preserver-spaces=\"true\">throw out<\/span><span data-preserver-spaces=\"true\"> an accurate price after a one-hour walk-through a house they have never seen before.<\/span><span data-preserver-spaces=\"true\">&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Note:<\/span><span data-preserver-spaces=\"true\"> You can (and many do) find a good general contractor who will walk every property for\/with you and always give you a <\/span><span data-preserver-spaces=\"true\">good,<\/span><span data-preserver-spaces=\"true\"> solid number.<\/span><span data-preserver-spaces=\"true\"> But be mindful that everyone\u2014even this veteran old GC\u2014can and will <\/span><span data-preserver-spaces=\"true\">be wrong on occasion<\/span><span data-preserver-spaces=\"true\">. Or sometimes, <\/span><span data-preserver-spaces=\"true\">there are surprises hiding<\/span><span data-preserver-spaces=\"true\"> in the house that you will not see until demo is complete, or the building inspector makes his first visit to the property.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">You can also <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/blog\/choosing-home-inspector\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">use a home inspector<\/span><\/a><span data-preserver-spaces=\"true\"> to gather a list of information on needed repairs and deficiencies. You will (and should) use a licensed home inspector to inspect the property <\/span><span data-preserver-spaces=\"true\">that you<\/span><span data-preserver-spaces=\"true\"> are considering purchasing. You do this once you have an accepted offer on the property, it is under contract, and you are within the inspection period.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But they can\u2019t and won\u2019t be able to throw a number at those tasks for you. It\u2019s just not their job. Home inspectors are specialists, and most will have no <\/span><span data-preserver-spaces=\"true\">true<\/span><span data-preserver-spaces=\"true\"> construction background. They might see it as opening themselves up to liability issues or, worse yet, a conflict of interest.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">How to Calculate Costs<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">However, once you have this list, it\u2019s certainly a good starting point. Then, you can use the internet to attach a price to each item on their report. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> is a sensible and <\/span><span data-preserver-spaces=\"true\">fairly<\/span><span data-preserver-spaces=\"true\"> safe approach.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">But what<\/span><span data-preserver-spaces=\"true\"> about additional improvements you might want to have done, like adding a bathroom or remodeling the kitchen?<\/span><span data-preserver-spaces=\"true\"> Maybe you\u2019d like to open up an old, claustrophobic house and convert the living room, dining room, and kitchen into a great room. Now you\u2019re back to square one.&nbsp;<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Develop a square footage cost. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> will take longer, but as you complete a few jobs, <\/span><span data-preserver-spaces=\"true\">just<\/span><span data-preserver-spaces=\"true\"> do the math and keep track of <\/span><span data-preserver-spaces=\"true\">what you are paying<\/span><span data-preserver-spaces=\"true\">.<\/span> <span data-preserver-spaces=\"true\">Does the tile contractor always <\/span><span data-preserver-spaces=\"true\">seem to<\/span><span data-preserver-spaces=\"true\"> get about $5 a square foot for his installation?<\/span><span data-preserver-spaces=\"true\"> Does the drywall crew always end up at about $6 a square foot? These are real-world numbers that you can rely on.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">You can also <\/span><span data-preserver-spaces=\"true\">try <\/span><span data-preserver-spaces=\"true\">to<\/span><span data-preserver-spaces=\"true\"> contact various subs and<\/span><span data-preserver-spaces=\"true\"> see if they will give you this square foot price.<\/span><span data-preserver-spaces=\"true\"> Some will, but many will not want to be bound by it.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">There are online calculators out there, even <\/span><a class=\"editor-rtfLink\" href=\"https:\/\/www.biggerpockets.com\/rehab-estimator\" target=\"_blank\" rel=\"noopener\"><span data-preserver-spaces=\"true\">one on the BiggerPockets site<\/span><\/a><span data-preserver-spaces=\"true\">. They can be of some use, but I would warn not <\/span><span data-preserver-spaces=\"true\">to <\/span><span data-preserver-spaces=\"true\">completely<\/span><span data-preserver-spaces=\"true\"> rely on these<\/span><span data-preserver-spaces=\"true\">. <\/span><span data-preserver-spaces=\"true\">They cannot always account for different areas, <\/span><span data-preserver-spaces=\"true\">or<\/span><span data-preserver-spaces=\"true\"> current price fluctuations, or a sudden <\/span><span data-preserver-spaces=\"true\">change in the economy<\/span><span data-preserver-spaces=\"true\">.<\/span><span data-preserver-spaces=\"true\"> But they can be very handy in assisting you get together a well-priced scope of work.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">Ask people that you know and trust about their recent projects. Maybe you\u2019ll get a good price on kitchen cabinets from one friend, and another will let you know what she paid to have her bathroom retiled.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">How to Customize Your Approach<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">I <\/span><span data-preserver-spaces=\"true\">would<\/span><span data-preserver-spaces=\"true\"> suggest using a different approach for different sizes and types of projects.<\/span><span data-preserver-spaces=\"true\"> For example:&nbsp;<\/span><\/p>\n\n\n\n<ul class=\"wp-block-list\">\n<li><span data-preserver-spaces=\"true\">You find a house that needs a complete remodel<\/span><span data-preserver-spaces=\"true\">, right<\/span><span data-preserver-spaces=\"true\"> down to the studs.<\/span> <span data-preserver-spaces=\"true\">This will absolutely demand that you hire a GC to go to the site <\/span><span data-preserver-spaces=\"true\">and<\/span><span data-preserver-spaces=\"true\"> walk it (with you there to watch and learn) and give you a rough price. You cannot be off by 20% on a $150,000 remodel project\u2014there goes your profit, and that might actually turn into a loss.<\/span><span data-preserver-spaces=\"true\"> That\u2019s not why we got into the business.<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">You\u2019ve found a nicely priced older home that has been well cared for, but nothing new or modern has <\/span><span data-preserver-spaces=\"true\">been done<\/span><span data-preserver-spaces=\"true\"> to it in 30 years. It needs a modern kitchen, two new bathrooms, new flooring and paint, and a new roof. That\u2019s maybe $45,000 worth of work. Once again, you can call the GC, or in this case, you can call subcontractors <\/span><span data-preserver-spaces=\"true\">yourself<\/span><span data-preserver-spaces=\"true\"> and ask for prices on each trade. How much is the cost of cabinets? How about paint, tile, flooring?<\/span><\/li>\n\n\n\n<li><span data-preserver-spaces=\"true\">For a small job, $10,000 or so, possibly needing only paint, carpet, and new appliances, measure (very carefully) and go shopping yourself. <\/span><span data-preserver-spaces=\"true\">Don\u2019t forget<\/span><span data-preserver-spaces=\"true\"> to include all costs <\/span><span data-preserver-spaces=\"true\">like<\/span><span data-preserver-spaces=\"true\"> taxes, delivery, installation, and the like.<\/span><\/li>\n<\/ul>\n\n\n\n<p><span data-preserver-spaces=\"true\">It can be a sound approach to use<\/span><span data-preserver-spaces=\"true\"> a variety and combination of these possible choices until you find the most comfortable way <\/span><span data-preserver-spaces=\"true\">for you to come up with<\/span><span data-preserver-spaces=\"true\"> a price range that you are willing to invest.<\/span><\/p>\n\n\n\n<p><span data-preserver-spaces=\"true\">And it<\/span><span data-preserver-spaces=\"true\"> must be noted that, as you would expect, prices vary greatly by region, from state to state, and even city to city within a state, <\/span><span data-preserver-spaces=\"true\">i.e.<\/span><span data-preserver-spaces=\"true\">, San Diego versus Los Angeles or San Francisco, or New York versus Buffalo.<\/span><\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><span data-preserver-spaces=\"true\">Final Thoughts<\/span><\/h2>\n\n\n\n<p><span data-preserver-spaces=\"true\">The more you get your hands dirty and invest some of your <\/span><span data-preserver-spaces=\"true\">own<\/span><span data-preserver-spaces=\"true\"> elbow grease in this process, the better you will get at estimating prices. It\u2019s not easy, and yes, you can make mistakes that <\/span><span data-preserver-spaces=\"true\">can<\/span><span data-preserver-spaces=\"true\"> cost a lot of money. But it is absolutely invaluable to be able to walk through a prospective fixer-upper house and put a pretty firm number on your construction costs. <\/span><span data-preserver-spaces=\"true\">This<\/span><span data-preserver-spaces=\"true\"> will set you apart from your competition and should help you become profitable\u2014there is a lot of money to <\/span><span data-preserver-spaces=\"true\">be made<\/span> <span data-preserver-spaces=\"true\">in fixing up<\/span><span data-preserver-spaces=\"true\"> distressed houses!<\/span><\/p>\n\n\n\n    \n  <div id=\"visibility-group-block_47c971a58049b953febc31e236d54a25\" class=\"visibility-group  hidden\">\n        \n\n<div id=\"hero-block_4d7749263df7777505d6640017569d0e\" class=\"first:mt-0 hero-block py-4  alignwide   has-background has-theme-gold-light-background-color has-text-color has-theme-gold-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<p class=\"has-theme-gold-color has-text-color has-large-font-size\" style=\"font-style:normal;font-weight:800\">Get the Best Loan Today<\/p>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-slate-900-color has-text-color\" style=\"font-size:16px\">Find trusted, <em><strong>investor-friendly<\/strong><\/em> lenders who specialize in your strategy. <\/p>\n\n\n\n<p><\/p>\n\n\n\n<div id=button-custom-event-block_2846bedf8e01a64bd417192555d772b6 class='button-custom-event'>\n      <a\n    href=\"https:\/\/www.biggerpockets.com\/business\/finder\/lenders\"\n        x-on:click=\"window.analytics.track('Blog Block | B2C Marketplace Lender Finder', {\n      referrer: 'https:\/\/www.biggerpockets.com\/blog\/how-to-calculate-repair-rehab-and-renovation-costs-for-any-project',\n    });\"\n    class=\" btn-shape inline-block no-underline has-background has-theme-gold-background-color has-text-color has-white-color\" target=\"_blank\">Find a Lender<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n                <div class=\" first:mt-0 relative h-full lg:flex lg:items-center\">\n            <img decoding=\"async\" class=\"object-cover w-full relative z-20 my-0  rounded-md hidden lg:block\" src=\"https:\/\/www.biggerpockets.com\/blog\/wp-content\/uploads\/2022\/08\/Marketplace-Blog-Blocks-Lender-v3.png\" alt=\"investor friendly lender, investor friendly real estate loans\" title=\"\">\n        <\/div>\n            <\/div>\n<\/div>\n\n  <\/div>\n  \n\n\n<div class=\"wp-block-group\"><div class=\"wp-block-group__inner-container is-layout-constrained wp-block-group-is-layout-constrained\">\n    \n  <div id=\"visibility-group-block_64dd31c79f00f\" class=\"visibility-group  \">\n        \n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n\n<div id=\"hero-block_64dd2875dba9d\" class=\"first:mt-0 hero-block py-4    has-background has-slate-100-background-color has-text-color has-theme-slate-color\">\n    <div\n        class=\" flex flex-wrap lg:flex-nowrap max-w-screen-xl mx-auto px-4 relative lg:items-center \">\n\n        <div class=\"relative z-30 w-full \">\n            <main class=\"py-4\">\n                \n\n<h3 class=\"wp-block-heading my-0 tracking-tight font-extrabold has-theme-slate-dark-color has-text-color has-large-font-size\">Join the community<\/h3>\n\n\n\n<p class=\"my-3 md:my-5 lg:my-8 has-theme-slate-color has-text-color\" style=\"font-size:16px;font-style:normal;font-weight:400\">Ready to succeed in real estate investing? Create a free BiggerPockets account to learn about investment strategies; ask questions and get answers from our community of +2 million members; connect with investor-friendly agents; and so much more. <\/p>\n\n\n\n<div id=button-custom-event-block_64dd2888dba9e class='button-custom-event'>\n      <a\n    href=\"https:\/\/www.biggerpockets.com\/signup\"\n        x-on:click=\"window.analytics.track('Blog Block | Acquisition | Free Membership Signup', {\n      referrer: 'https:\/\/www.biggerpockets.com\/blog\/how-to-calculate-repair-rehab-and-renovation-costs-for-any-project',\n    });\"\n    class=\" btn-shape inline-block no-underline has-background has-theme-blue-background-color has-text-color has-white-color\" target=\"_blank\">Sign Up<\/a>\n  <\/div>\n\n            <\/main>\n        <\/div>\n\n            <\/div>\n<\/div>\n\n\n<div style=\"height:10px\" aria-hidden=\"true\" class=\"wp-block-spacer\"><\/div>\n\n\n  <\/div>\n  <\/div><\/div>\n","protected":false},"excerpt":{"rendered":"<p>The three R&#8217;s don&#8217;t have to be too expensive, but it&#8217;s important to run these calculations before you start.<\/p>\n","protected":false},"author":613698,"featured_media":173277,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"_acf_changed":false,"footnotes":""},"categories":[7392,7119],"tags":[],"class_list":["post-174585","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-rehab-diy","category-biggerpockets-daily"],"acf":[],"comment_count":0,"_links":{"self":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/174585","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/users\/613698"}],"replies":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/comments?post=174585"}],"version-history":[{"count":0,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/posts\/174585\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media\/173277"}],"wp:attachment":[{"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/media?parent=174585"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/categories?post=174585"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.biggerpockets.com\/blog\/wp-json\/wp\/v2\/tags?post=174585"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}