How to estimate renovation cost?

Question

Hi all,

I am new to REI and look at different markets as my farm area. I stumbled across this bank-owned property in Pittsburg here in quite a decent area: https://www.homepath.fanniemae... I don't really consider buying it at this point, but I read a lot and feel like I should start with something less heavy. That said, I really struggle to estimate how much a rehab for these kind of things cost (in that area). Does anybody have tips to get closer to such a number for houses like that one before looping in contractors? I would be highly interested in your thought processes untangling these kinds of pictures!

Matt Dingus · Answer

Hi @Sylvia Schumacher,

As said above this can be the toughest # to come up with when seeking to buy a rehab property. It helps to have a network and resources in a particular area that have done work on similar projects or invested in properties in similar condition. They'll be able to give you a best guess-timate so you're not going into a project with no target budget on rehab. And as a rule of thumb most say to tack on 20% just because everything always goes over budget. If you need any help with this in Pittsburgh area, shoot me a DM and I'd love to help. Nonetheless good luck on your journey!

Shiela R. · Answer

@Sylvia Schumacher hello and way to take some initiative!  There is no short cut, unfortunately.  Materials and labor vary, depending on the area. And You really need to educate yourself.  For practice, get into the house and take a clipboard. If it's listed, call the listing agent.  That is, if you don't have a trusted buyer's agent to work with. I'd tell the agent you are interested in buying.  Are you pre-qualified or have proof of funds? You'll likely need this, depending on how experienced the agent is and how hot the market. Take notes and pictures and then go to a big box store and another, smaller local place.  Price out flooring, tile, cabinets, etc, whatever the house needs.  Start a spreadsheet and do this until you feel confident walking a property and estimating cost on the spot from all of your entries :)

Ben Scott · Answer

I see the home was built in 1910 so unless there have been updates you're working with knob and tube wiring, clay pipes, etc. For your first project, I'd recommend identifying something built after the mid 1950s that has more modern building standards. Those old homes are sturdy but the components often are not.

Taylor Dasch · Answer

Estimating the renovation is the hardest part in my opinion, there are calculators and prices per square foot for each different job, but I have found the actual costs to vary significantly. The best thing that you can do in my opinion is to walk the property with the contractor you will be using.