How To Estimate Rehab Costs

Rehab Cost Estimation Has Changed

There once was a time when a house remodel was a shot in the dark. New home construction was a follow-the-instructions kind of experience with well-known formulas, calculations, and estimating tools. Remodeling a home was an entirely different animal. The difference being the contractor never knew what he might encounter behind the walls, under the floors, and above the ceilings once work got underway. The 21st Century brings all the power and value of many different resources which aid in the process of estimating the costs for rehabilitating a property.

Don’t Work Harder Work Smarter

Learning lessons the old-fashioned way can be painful, time-consuming, and expensive. Why not get smart and avoid many problems and issues? Homeowners with little or no experience remodeling a home as well as real estate investors who want to start fixing and flipping properties can gain brain power by reading up on the subject. There are many books, articles, and planning tools available from a wide range of resources. Finding information and data about specific types of remodeling like plumbing, electrical, flooring, painting, and every other kind of project have volumes available for consumption. Small projects or major rebuilds have plenty of guides, technical directions, and videos available with the latest products, techniques, and other important instructional support.

It’s All About the Budget

There is one consideration that guides all decisions and that’s the budget for the project. It doesn’t matter whether the project involves replacing sprinkler heads or remodeling the master bathroom, the budget is going to determine many factors involving decisions about materials, labor, and time. The following items should be a part of every project budget:

  • – Homeowners and contractors using sub-contractors both need to consider the cost of either their own time or the cost of hiring contract labor. Personal time spent on a project can be important if the project involves a rental property as personal time can be calculated into the costs of construction. Those construction costs are used to offset income generated by the rental.
  •  – Due to conditions beyond their control, remodelers are often confronted with material shortages or unavailability making estimating of materials a difficult task to accomplish in some cases. It is advisable to identify multiple sources to ensure better pricing as well as material availability in the event a primary supplier runs out of stock.
  •  – The multitude of resources and the wide range of tools and equipment available to work on a remodeling project staggers the mind. Commercial contractors prefer industrial-grade tools and equipment. Homeowners tend to go to the big box for their supplies. Wherever the tools and equipment come from, it’s important to ensure they meet the specifications required by building codes and working conditions.
  •  – Some home improvement projects don’t require any kind of local municipal building permit, but any changes to things like roofs, windows, walls, electrical, plumbing, and other building modifications will require a building permit. Most permits are available online and don’t require a trip to the county or city tax offices. Building inspectors should always be expected on the job without notice and failure to have the proper permit can result in large fines and penalties.
  •  – The cost of cleaning up after a project can be high if a lot of waste will be involved in the project. The expenses of having debris and garbage hauled away can bump up the overall budget. Taking the construction debris to a landfill is a lower-cost alternative to contracting with a waste removal service. From tear-out to final paint, there will be refuse that will have to be dealt with and budgeting for the costs only makes sense.

Books On Estimating Rehab Costs

Practically since the invention of the printing press, experts have been writing about how to do everything in home construction. Generation to generation, instructions, guides, and templates instructed laborers on all stages of building or repairing a house. Today, the number of books available to peruse is beyond comprehension. The good news is that no matter what type of remodeling is being considered, there is a book written to provide guidance and instruction. Being the 21st Century, the quantity of books is overshadowed by the number of instructional videos. Tool and equipment manufacturers, contractors, trade schools, and other resources are waiting to teach anyone and everyone anything and everything about rehabilitating a home or any part of it.

House Rehab Software

Like written material, computer software and applications providing guidance and instructional tools for home rehabilitation abound. All across the internet, software is available that helps with every phase and aspect of conducting a home remodeling project. Estimation software has been incorporated into software packages that can also schedule, track, and help budget rehab projects. Smart real estate investors who fix and flip homes rely on the latest software to help guide them and manage individual or multiple projects efficiently. Beginners and veterans of rehabs use rehab cost estimator spreadsheets as a fundamental tool when putting a budget together.

Rehab Costs Per Square Foot

One of the tried-and-true methods of calculating the budget for a home remodeling project is to estimate the costs by the square footage that will be involved. New home construction budgets work similarly but do not involve some of the costs experienced in a remodeling project. The idea is to incorporate all the components required to complete the work necessary to finish the project. According to, the average new home, construction estimate is $128 per square foot. For a rehab project, the costs can vary between $10 to $20 per square foot for paint and flooring up to $100 or more for remodeling a kitchen or bathroom.

Cost of Rehabbing a House

In 2020, the cost of rehabilitating an entire house ranges between $15,000 on the low end to $200,000 and more on the high end, according to This is what makes conducting a thorough estimation of costs so important. With so much money on the line, it is vital to have limits and controls on spending or the money might disappear before the project is completed. The cost of rehabbing a house also depends on where the property is located. Homes in Detroit cost much less to rehab than homes in San Diego or San Francisco, which can cost as much as $1,000+ per square foot!

Start With a Useful Tool

One tool many professional real estate investors use to estimate costs if you are getting a loan on your project is a fix-and-flip calculator. Many contractors and construction companies offer a different version of this calculator that will help you keep track of the actual rehab costs. There is a fix-and-flip calculator online available from Neal Funding that works for many professional house flippers to help determine the costs on a hard money loan. Homeowners, property investors, and construction managers can go to the Neal Funding website and use the free calculation tool there. They can also send an email inquiry to or they can call 315-699-4703 to learn more about house rehab estimation tools and formulas.

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