How to Estimate Your Rehab Cost on Real Estate Purchases

By
Real Estate Agent with National Real Estate Network, LLC

Real estate rehab costs can vary greatly depending on the scope of work and materials required. In order to accurately estimate your rehab cost, you'll need to take into account a few key factors:

  1. Scope of Work: Determine what improvements are necessary for the property. This includes anything from minor repairs and cosmetic updates to major structural renovations or additions. It's important to be as detailed as possible when creating this list so that you have an accurate assessment of all the work that needs to be done before making a purchase offer.
  2. Materials Needed: Once you have determined the scope of work, make sure you know what materials will be needed in order to complete each project on your list (e.g., paint, drywall, flooring). You may also want to consider any special items or equipment that might be needed (e.g., specialized tools or safety gear). Having an accurate understanding of these costs is essential in calculating your total rehab budget.
  3. Labor Costs: If parts of the renovation will require professional help (i.e., electricians, plumbers), make sure you factor in their hourly rate plus any additional fees associated with their services (e.g., permit fees). Depending on how much labor is needed for your project(s), this could significantly impact your overall budget so it’s important not to overlook these potential costs when estimating your total rehab cost .

4.. Contingency Budget : Lastly, it’s always wise plan ahead by setting aside some extra money for unexpected expenses during the process—this is known as a contingency budget! Unexpected surprises like mold remediation or unanticipated structural issues can arise at anytime during a renovation project so having some extra funds set aside just in case can help save time and money down the road if something unexpected does occur while working on the property

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Comments (1)

Joe Jackson
Keller Williams Capital Partners Realty - Columbus, OH
Clintonville and Central Ohio Real Estate Expert

This is an excellent post with great information. Thanks for sharing it.

Have a super fantastic week!
Joe Jackson, Realtor-KWCP

Feb 08, 2023 05:12 AM