5 rules that keep my rental rehabs on budget

Rehabbing & House Flipping
3dFollow

5 rules that keep my rental rehabs on budget

BJ Everson
Realtor · Columbus, Franklin County · Member since 2026 · 48 posts · 12 votes

1. Scope before price. I walk every room with the contractor and write a line-item scope, so every bid is apples to apples.

2. Rental grade, not retail grade. I use durable LVP, neutral paint, and mid-grade fixtures. The goal is lower turnover cost, not a magazine finish.

3. Draw schedule tied to finished milestones, with photos. I never pay far ahead of the work.

4. 10–15% contingency. Older Columbus houses always have something behind the walls.

5. Permits and lead-safe practices on pre-1978 homes. Shortcuts cost more at the refi or the first tenant complaint.

What's the costliest surprise you've found mid-rehab?

3Reply
479 views

Most Popular Reply

Richard NeesePro Member
Rental Property Investor · South Vinemont, AL · Member since 2026 · 48 posts · 16 votes
2d

Great advice and it fits our model down here in North Alabama. I have my own construction crew but its almost word for word what we do. We even backed off of the finishes on our flip properties because we were spending an additional 5-10% on things that "sold better" we found that pricing accordingly led to similar sales and cut down on the last 5% which is usually the most costly. White box paint, contractor grade finishes. Good home at a good price . Thank you for contributing to the community !

1Reply
See this reply in the discussion

12 Replies

Jump to latestLatest
  • Richard NeesePro Member
    Rental Property Investor · South Vinemont, AL · Member since 2026 · 48 posts · 16 votes
    2d

    Great advice and it fits our model down here in North Alabama. I have my own construction crew but its almost word for word what we do. We even backed off of the finishes on our flip properties because we were spending an additional 5-10% on things that "sold better" we found that pricing accordingly led to similar sales and cut down on the last 5% which is usually the most costly. White box paint, contractor grade finishes. Good home at a good price . Thank you for contributing to the community !

    1Reply
    • BJ Everson
      OP
      Realtor · Columbus, Franklin County · Member since 2026 · 48 posts · 12 votes
      2d

      Always good to focus in on the numbers at your level and see what’s actually beneficial to the bottom line and what’s not!

      0Reply
  • Mark UpdegraffBusiness Member
    Real Estate Broker · Rochester, NY · Member since 2010 · 1k+ posts · 712 votes
    2d

    @BJ Everson I’d add change control as a sixth rule. The line-item scope works until a hidden condition appears or someone says, “while you’re there.” Before approving a change, I want the added cost, schedule impact and the original scope item it replaces documented. Otherwise the contingency quietly becomes a second budget and nobody can explain where it went. In older Rochester housing stock, surprises are expected; undocumented decisions are the part that usually makes them expensive.

    Podcast Guest on Show #112
    Updegraff Group Realty4.746 Reviews
    WebsiteView Page
    0Reply
    • BJ Everson
      OP
      Realtor · Columbus, Franklin County · Member since 2026 · 48 posts · 12 votes
      2d

      That’s a good add for older housing stock. We have a few neighborhoods in Columbus where this would be beneficial as well.

      0Reply
  • Divin KanyamaBusiness Member
    Accountant · Seattle, WA · Member since 2025 · 618 posts · 264 votes
    1d

    @BJ Everson Great framework—especially scoping before pricing and tying draws to completed milestones. Hidden water damage would be high on my list of costly surprises: what looks like a small leak can turn into repairs to framing, subfloors, and plumbing once things are opened up.

    I’d add one guardrail: document and price every change order before approving the extra work. A contingency helps absorb surprises, but it shouldn’t become permission for the scope to drift.

    [email protected]
    WEMBO CPA532 Reviews
    WebsiteView Page
    1Reply
    • BJ Everson
      OP
      Realtor · Columbus, Franklin County · Member since 2026 · 48 posts · 12 votes
      1d

      This is a great add for the contingency use.

      0Reply
  • Vladimirs Veiss
    Developer · Riga, Latvia | Switzerland | Florida · Member since 2026 · 127 posts · 19 votes
    1d

    @BJ Everson Great list, BJ, and nice to meet someone working in Columbus! That's where we plan to start in the US.

    Our costliest surprise was in Switzerland: a burst pipe flooded a ceiling, and we ended up repainting the whole floor at our own cost. Since then we price the "what if" scenarios before the job starts: as is, if the pipes need replacing, if the wiring does too. The owner sees every number upfront, and no stage gets paid until it's checked with photos.

    Rule 3 is my favorite too. A draw tied to a finished, photographed milestone keeps everyone honest.

    Since you know the housing stock there: if you had to price one "what if" upfront on a typical Columbus rental, which would it be: cast iron drains, old wiring, or the foundation?

    Have a great Sunday!

    0Reply
    • BJ Everson
      OP
      Realtor · Columbus, Franklin County · Member since 2026 · 48 posts · 12 votes
      1d

      Covering the “what ifs” is a must. And I point my clients to value add properties so we’re doing some of the needed work ourselves and know it’s done right before putting a tenant in place. That takes a lot of the “what ifs” off the table. But do like a contingency account in place for my client so they are covered for something happening , esp if they use the cash flow for their everyday uses.

      0Reply
  • Bennett Vinson
    Real Estate Consultant · Alabama | SFR Operations Nationwide · Member since 2026 · 36 posts · 8 votes
    1d

    BJ, rule 3 is the one I'd push hardest. Over 20 years of renovations and turns, the money I've seen leak wasn't from bad bids, it was from paying a draw on "done" that nobody actually walked. Mark's change control point fits right in: each change order should carry its own dated photo of the condition before and after, tied to the scope line it changed. Then the contingency has a paper trail. I built Eyes On the House™ (patent pending) to lock those photos to each draw. Happy to compare notes on what you check before releasing a draw.

    0Reply
    • BJ Everson
      OP
      Realtor · Columbus, Franklin County · Member since 2026 · 48 posts · 12 votes
      1d

      I like this approach! I’m an open book so always happy to compare notes and best practices!

      0Reply
    • Vladimirs Veiss
      Developer · Riga, Latvia | Switzerland | Florida · Member since 2026 · 127 posts · 19 votes
      18h

      @BJ Everson, thank you, and I'd really like to take you up on comparing notes!

      Doing the needed work yourselves before a tenant moves in makes a lot of sense: you know what's behind the walls before day one. And a contingency account for clients who live on the cash flow is a smart detail.

      One thing I'm curious about in Columbus: which exterior and roof work do you try to finish before the first freeze, and what waits until spring?

      I'll send you a connection request here so we can stay in touch. Have a great week!

      0Reply
  • Muyees Ayilara
    Lender · Boynton Beach, FL · Member since 2026 · 137 posts · 61 votes
    10h

    BJ this is solid. I'm in Delray 33446 Monarch Lakes - townhouse rehabs $60k range. Rule 1 and 2 saved me - scope before price and rental grade not retail. I was pricing retail LVP and $400 faucets and it killed my $242k to $420k ARV math. Now mid-grade, same rent $2100 low end comps. Rule 4 is real too - 10% contingency always goes.

    0Reply
Join the conversationCreate a free account to reply, vote on answers and follow this thread.
Log InJoin for Free