Remodel & Renovate: How to Estimate Total Rehab Cost
No matter you are rehabbing a house to rent or flip it out, or even to live in, your main aim will be maximizing its appearance while keeping the expenses within your budget. And it is much necessary to spend carefully if you are interested in getting the good value for money. However, a common factor that all of you will be agree with is remaining within your budget will only be possible when you will have a right idea of the rehab costs.
Having an exact estimate of the rehab costs would be much difficult for you if you are new to the process. You need to follow a proper process for having a right estimation of all the repairs and renovations. There are lots of things that come in house rehab like paint, furniture replacements, heating and cooling system repairs, roof re-installation, plumbing, flooring and many others. It would be much hard for you to make a right estimate if you have never gone through these process.
A common mistake that most of the new rehabbers do is overestimating the costs thinking that it would save them from losses. But, let us tell you that overestimating is equally harmful as underestimating. You would be facing investment failure in either way. An underestimated rehabbing cost will let you spend a specific time on the task and still getting far fewer profits than you would have expected. At worse, you can also face loss, instead of making profits in such a case. Conversely, no doubt you can eliminate the chances of loss by overestimating the cost, but you may find difficulties in selling that property. It takes times to get offers on such deals.
Now, you must be thinking that what you can do to have a right estimate. Well, we have the answer to your query. Here are few simple tips that you can follow.
First of all, make a list of all the repairs, replacements and renovations that need to be done. At the same time, note down the material that would be required for that.
Now, visit the local home improvement stores and see the costs of the rehabbing material. As the materials come from different companies, there would be a difference in the prices. The best idea would be writing down the upper and lower range of costs.
Next, you need to inspect the labor costs for the tasks for which you have two options. First is consulting with other investors to know about the costs that different contractors charge. And second is to go through the different service providers and ask them their prices. You can choose a general price for which you will be able to get both quality and affordable price.
After that, compile the list of the low and high price. Find an average cost by dividing their sum by 2. Though the cost can be little less or more, but it would be the best value you can choose as house rehabbing cost. However, always try to keep the value a little above to the estimated one.
Moreover, you can also consult with a home inspector to have a right estimation of rehab cost.