How to Estimate Rehab Costs of a House in the Right Way

In this article, I will share how to estimate rehab costs of a house for your fixing and flipping business. The estimation can help you make a good profit, and the average one will lead to losses you can’t handle.

Plus, how much it may cost you depending on the condition of the house and what checklist you should follow while doing this so that you don’t end up missing anything that may harm your overall estimation. So first, let’s learn how much this rehab can cost you.

How much does it Cost to Rehab a House?

It can depend on many things, and no one can tell you the accurate price without analyzing the house. But on average, it may cost you from $10,000 to $20,000 to repair everything for a small home.

But don’t think it’s the final price. Every house is unique, and the problems will be different. Some homes may need extensive repairs like foundation work, new paint, landscaping, plumbing, or HVAC replacement. And others may need just a small repair in the electrical system and cleaning.

It’s best you talk to your general contractor, who can give you the estimation according to the current market condition, the cost of labor, and materials. The average price of labor and materials is volatile. These things may increase your cost. 

Make your due diligence, know all the ins and outs of the house, and then decide whether it’s worth it. Here is how to estimate rehab costs the right way.

How to Estimate Rehab Costs the Right way

Before I give you the rehab checklist, have a look at these rehab questions and answer as much as you can because these are mostly overlooked by investors, thinking they can manage them all. But I want you to get a good idea of what you are about to do. So answer these house rehab questions.

  • The condition of the walls, how good are they? Does it need a repair or a new coat of paint?
  • What about the kitchens and bathrooms? Is it look modern, or do I have to replace them and build them from scratch?
  • What is the condition of the flooring and carpets? Do we need to change them? 
  • Are any items in that house that need to be removed, cleaned, or replaced?
  • What about the landscaping? How bad is it? 

Most of the time, people ignore these things, which is okay for someone who already lives there but not for you. The look and feel will have a huge impact on buying decisions of the buyer. So answer questions and follow the next five due diligence methods to estimate rehab costs.

1. Inspect the House Well Enough

The first thing to do is inspect the house for a basic overview of what can be paired and what needs replacing. Not too fancy, just have a look. Then understand the look and feel. A good inspection will tell you that the wall on the inside needs repair soon, but it can not tell you that it’s an odd color to have in the house or that appliances need a new version or any bathroom fixtures updated. Those things come later, but here identify the potential damages with your eyes and have an estimate in your mind.

2. Double Check the Interior and Exterior 

Interior and exterior inspection for rehabbing

Now the most amazing thing about this rehab process. What to check while doing professional due diligence, and what you should consider changing completely if your budget supports it. Here is the list.

The Roof 

The main thing here is the age of the roof. It can have a good effect. It will determine how much you can sell the house for. Get a check from a professional and know if there is any damage by the cyclone or something like that. If it’s there, add it to your repair list. You may need a wind mitigation report on the roof in some states that will cost you a few hundred dollars. But these reports can be crucial for selling the house faster.


No one likes broken tiles or a carpet ripped from the side. It is better to change the whole carpet but only replace the tile if it’s completely broken. If you can not find a matching tile, don’t replace it. But try to repair it, or change the whole set, which will cost you huge money.

The Paint

Check the interior and exterior paint with the date it was created. Can it last with a little cleaning, or do I have to replace it with a new one? Paint is the first thing people will notice, so make it as attractive as people by maintaining a generalization.

HVAC Systems 

HAVC means Heating, Ventilation, and Air Conditioning. Ask the owner how old those HAVC systems are and how long they can go if you repair them. If it’s too old for over ten years, you should consider changing them if your budget suits it. You can also ask your agent who can help you with this. 

All Electrical Systems

Prioritize all electrical repairs above anything else, like changing the lights, fans, and switchboards if they become unusable. No one will buy a house with faulty wiring, and also it’s illegal in most states to offer your client a damaged electrical system. If you don’t pay attention to these, then know those buyers will simply walk away, and you will lose that deal. Repair them when you still got the time.


Plumbing is also an important thing, like electrical wiring. Hire an inspector and find out all those faulty pipes and existing water damage and repair them as soon as possible. If something is damaged, change all these pipelines to give your client fresh water. Remember, you should never hide anything in here just to save some money. That will lead you to some serious troubles. Be honest and make the necessary rehab. 

Baths and Cabinets

Look at the bathroom and make it super clean, as most buyers will first analyze the washroom. It tells a lot about the house. Make it shiny and attractive. Some modern cabinets may not need a replacement, but a small piece of paint can do the work. Discuss it with your general contractor about it.

Kitchen and Appliances 

These are expensive, and you don’t want to spend huge bucks on them. But sometimes those appliances become unusable, and you have to change them. But try to avoid the expenses and if you have to do then negotiate with the seller and reduce their asking price. Change them if needed to make the house complete.

Landscaping, Pools, Sheds, and Porches

As I have said earlier, most people avoid landscaping. They just don’t feel like maintaining it. A similar thing happens with pools, sheds, and porches. But cleaning all those will make the house look like new and a place for attraction. Do these repairs, and you will see the changes. 

Do a Final Check

Now make a final check to verify your list if you have something left over. By doing all the verification, you can sell that house for a higher price than before. It means the more value you add to the house, the better your profit will be. There are many things to consider when you estimate rehab costs, but these are the most important ones. Do not neglect a single of them.

3. Understand the Local Market 

Now understand the local market and the cost of those things as every area will have a different cost of labor, materials, and the house depending on the demand and supply. Make an assumption and estimate rehab costs of that house.

Here you will determine what the house really needs in terms of repair and develop a list of it, with an estimated price according to your knowledge. Then think can this get you profit or cash flow if you want to rent it? If yes, get a bid from the contractor. 

4. Get a Contractor Bids

You don’t want bids from everyone, but only from good contractors. Finding a good contractor is hard, but through recommendations of family and friends, online resources, and your agent, you can get one. Then you ask them for a bid. 

Do a similar thing with other contractors and ask for bids from them. Then choose based on your taste because the price is not always the decision maker. You want to make the house as attractive as possible. So choose the one that best suit your business. But check the background well, and read their reviews. So that you can hire the best guy for the job. 

5. Things Can Increase Your Estimated Rehab Cost

Things Can Increase Your Estimated Rehab Cost

There are some other things that can have an effect when you estimate rehab costs, and you can not control them. But you can try to reduce them by negotiation.

  • The Location: The local market conditions will create an effect on the price of the rehab. 
  • The Total Time: In the end, it’s all about time. If a rehab needs to be done within a few days, expect to pay more, and vice versa.
  • Material prices: The price of the materials you are going to use may vary based on the current market situation.
  • The labor cost: The best skills are the most expensive ones in a rehab business. But the average price for labor depends on market conditions and local wage scale. No one can control it. You have to go with what the market says.
  • Quality of the finishes: The better the finish of each item is, the better the look will be and the better the price. You have to decide what material to use as it will increase or decrease the overall cost. You don’t want the expenses to go higher when you estimate rehab costs. So do your analysis accordingly.

Last Words

So now you tell me how to estimate rehab costs? The answer is by following these steps and creating a checklist I have shared with you. You can use some house-flipping software to manage all those data. So that you can make a better decision. I recommend you discuss with a contractor to get more details on rehab costs. Thanks for making it to the end. See you soon.

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