Calculating repair costs on a home renovation is always difficult. When you’re making a lot of offers, you don’t have time to get a GC to bid out every property. You have to get good at estimating based on the pictures. Here is how we do it.
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We use the Price Per Sq Ft Method to estimate repair costs. Before I get into that, let me add a few caveats to this.
- Market, Price Point, Licensed Contractor, Unlicensed Contractor, Home Age, Permits, and whether you sub the job out will drastically affect these values.
- The values I give are what I see in Vegas. We have very good conditions for renovating because we have newer homes and good weather. Some markets you have to replace everything to the studs every time. We don’t have to do that here.
- These estimates are for entry level flips. We are using budget materials. If you wanted really nice luxury finishes, it will push your budget up.
- This is for cosmetic flips. I’m not including ripping out all the drywall, plumbing, or electrical. That would have to be added on if you have to do that.
That being said here are the estimate we use:
$5-10 Per Sq Ft for a Clean Up Rehab. This would be paint and carpet. Maybe some small fixtures and clean up items.
$15 Per Sq Ft for a Lipstick Rehab. This would be Paint, Flooring, Countertops, Refinishing Cabinets, Refinishing Showers.
$20 Per Sq Ft for an Interior Remodel. This would be Paint, Flooring, Counters, New Cabinets, New Showers.
$25 Per Sq Ft for a Full Remodel. This would include everything with the Interior remodel plus some exterior work and landscaping.
Anything else you would add on for extras. Typically we add $5,000 per big item such as AC, Pool Plaster, Pool Equipment, and Roof. If it needs two of those items, then add $10,000 to your budget.
This method serves us very well in Las Vegas. You can do the same thing in your market, but you may have to adjust your values. For example in Tucson where we invest, a $25 Full Remodel costs us $40. That’s totally fine, we just need to understand our costs so that we can make accurate offers.
Also make sure that you always get a bid before purchasing. This method is strictly to estimate. Don’t get yourself in trouble relying on this only. A contractor is always going to be your best bet for determining what it will really cost.