Glossary
Rehab (rehab budget)
Rehab is the repair and renovation work on an investment property, and the budget for it. A rehab estimate is usually built either from a per square foot preset for the scope or line by line from bids.
The rehab number does two jobs. It is a cost in your deal math, and it is a promise about what the house will look like, which drives the ARV. Both have to match.
How to estimate it
Early on, use a per square foot number for the scope of work. Run The Deal's planning presets before regional adjustment are:
| Scope | Planning cost per sq ft | Typical work |
|---|---|---|
| Cosmetic | $20 | Paint, LVP, fixtures, hardware, landscaping |
| Light | $35 | Cosmetic plus kitchen and bath refresh |
| Medium | $55 | New kitchen, 1 to 2 baths, HVAC or roof |
| Heavy | $90 | Medium plus roof, HVAC, panel, plumbing, windows |
| Gut | $125 | To the studs: all systems, drywall, framing repairs |
Once you have walked the house, switch to a line item budget or contractor bids. Then add contingency.
- 1,400 sq ft x $55
- $77,000
- Contingency for medium scope (15%)
- $11,550
Presets are planning assumptions, not quotes. Local labor and material costs vary.
Common mistakes
- Budgeting a cosmetic job on a house that needs a roof or HVAC. Price the systems first.
- Leaving out permits, dumpsters, final clean and staging.
- Skipping contingency because the bid looks complete.
- Underestimating time. Every extra month adds carry costs.
For a deeper walkthrough, read how to estimate rehab costs or try the rehab cost estimator.
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