How to estimate rehab costs
By Austin Frangoules | Updated | 5 min read
Estimate rehab costs in two passes. First, multiply the square footage by a per square foot rate for the scope of work, adjusted for your market and the age of the house. Then, once you walk the property, build a line-item budget from quantities and unit costs, add permits and a contingency, and check it against bids.
Two ways to estimate a rehab
A quick estimate gets you through the first screen in a minute. It answers one question: is this deal worth a walk-through? A line-item estimate takes longer but is the number you should offer on. Use the quick method to sort leads and the line-item method before you sign.
All the costs below are planning numbers for investor-grade finishes with contractor-direct pricing. They vary by market and contractor. Retail remodel prices can run much higher. Your own bids and closed jobs are always the better source.
The quick estimate: cost per square foot by scope
Pick the scope that matches the work, multiply by the heated square footage, then apply two multipliers: one for your market's labor and material costs, and one for the age of the house.
| Scope | Default per sqft | Range | Typical work |
|---|---|---|---|
| Cosmetic | $20 | $15 to $30 | Paint, LVP, fixtures, hardware, landscaping, deep clean |
| Light | $35 | $25 to $40 | Cosmetic plus kitchen refresh (counters, appliances) and bath refresh |
| Medium | $55 | $40 to $75 | Light plus new kitchen, 1 to 2 full baths, HVAC or roof, some windows |
| Heavy | $90 | $75 to $110 | Medium plus roof and HVAC, panel, plumbing, windows, layout changes |
| Gut | $125 | $100 to $150 | To the studs: all systems, drywall, insulation, framing repairs |
- Market multiplier: 1.00 is the baseline. Higher-cost metros run above it, for example about 1.20 in Northern Virginia, and resort areas with scarce labor can run about 1.10. Some rural markets run a little below.
- Age multiplier: 1.15 for homes built before 1950, 1.05 for 1950 to 1978, and 1.00 for newer homes. Older houses hide more surprises.
- 1,400 sqft x $35 (light scope)
- $49,000
- x 1.05 market multiplier
- $51,450
- x 1.05 age multiplier (built 1965)
- $54,022.50
- Range using $25 to $40 per sqft
- $38,587.50 to $61,740
- Contingency at 10% (light scope)
- $5,402.25
Planning numbers. Use this to decide whether to walk the house, not to set a final offer.
The line-item estimate: quantity times unit cost
On the walk-through, list every item of work with a quantity. Multiply each by a unit cost, add them up, apply your market multiplier, then add permits as a share of that hard cost. This is the number that should drive your offer.
| Line item | Unit | Default | Range |
|---|---|---|---|
| Demo and dumpster | per 30-yard | $650 | $500 to $800 |
| Roof, architectural shingle tear-off | per sqft of roof | $6.00 | $4.50 to $8.00 |
| HVAC system, heat pump, ducts reused | each | $9,000 | $7,000 to $13,000 |
| Water heater | each | $1,800 | $1,400 to $2,600 |
| Electrical panel upgrade | each | $2,800 | $2,000 to $4,000 |
| Full rewire | per sqft | $7.00 | $5 to $10 |
| Plumbing repipe (PEX) | per sqft | $5.00 | $4 to $8 |
| Windows, vinyl, installed | each | $650 | $450 to $900 |
| Interior paint, walls, trim, ceilings | per sqft of floor | $3.00 | $2.50 to $4.50 |
| LVP flooring, installed | per sqft | $5.00 | $4 to $7 |
| Kitchen (cabinets, quartz, backsplash, fixtures) | each | $18,000 | $12,000 to $30,000 |
| Full bath | each | $10,000 | $7,000 to $18,000 |
| Crawlspace encapsulation | each | $7,500 | $4,000 to $15,000 |
| Permits and plans | % of hard cost | 2% | 1% to 4% |
| Final clean and punch | each | $750 | $500 to $1,200 |
- Roof: 1,800 sqft x $6
- $10,800
- HVAC $9,000, water heater $1,800, panel $2,800
- $13,600
- Windows: 12 x $650
- $7,800
- LVP: 1,000 sqft x $5
- $5,000
- Interior paint: 1,400 sqft x $3
- $4,200
- Hard cost (market multiplier 1.00)
- $41,400
- Permits at 2% of hard cost
- $828
- Rehab before contingency
- $42,228
- Contingency at 15% (medium scope)
- $6,334.20
Planning unit costs. Replace each with a quote once you have one.
Pick the right contingency
Contingency is money you plan to spend on what you cannot see yet: rot under the tub, a bad sewer line, a panel the inspector rejects. Size it by risk, not by hope.
- Cosmetic and light: 10%.
- Medium: 15%.
- Heavy: 20%.
- Gut: 25%.
- Built before 1950, or any structural work: add 5%.
- A signed contractor bid: about 10%, since the bid already prices the scope.
Budget profit as if the contingency gets spent. If it does not, that is upside, not the plan.
What to look for on the walk-through
The expensive surprises hide in a few places. Check them before you trust any number:
- Roof age and soft spots, and attic stains.
- HVAC age and the data plate on the water heater.
- The electrical panel brand and capacity. Some older panel brands usually need replacing.
- Plumbing material. Cast iron drains and polybutylene supply lines in older homes often mean a repipe.
- Crawlspace moisture, termite damage and sagging floors.
- Whether the house sits in a flood zone, which changes insurance and sometimes what you may build.
- Work done without permits, which can force rework at inspection.
Turn the estimate into a schedule and bids
An estimate becomes real when contractors bid each line. Compare bids line by line against your budget, not just the total. Once work starts, approve every change order in writing, collect a lien waiver with each payment, and keep the punch list short by inspecting as you go.
After each job, compare what you estimated to what you spent. Run The Deal's rehab engine can blend your actual job costs into its unit costs, weighting newer jobs more, so the next estimate starts from your real numbers instead of a generic default.
Common mistakes
- Using retail remodel prices from consumer sites for an investor rehab, or the reverse.
- Skipping the age multiplier on a pre-1950 house.
- No permits line. Permits and plans are a real cost, and unpermitted work can cost more later.
- Zero contingency because the house looks clean.
- Pricing finishes above the neighborhood. Match the finishes in your comps, not your own taste.
- Forgetting the rehab drives the timeline. More scope means more months of holding costs.
Put the rehab into the full deal with our fix and flip budget template. Build your estimate line by line in the free rehab cost estimator, then run your numbers in the free flip calculator.
Questions
How much does a rehab cost per square foot?
As planning numbers for investor-grade work: about $20 for cosmetic, $35 for light, $55 for medium, $90 for heavy and $125 for a gut rehab, before market and age adjustments. Real costs vary by market and contractor.
How accurate is a per square foot rehab estimate?
Good enough to screen a deal, not to set a final offer. The range for each scope is wide. Walk the house and build a line-item estimate before you sign.
How much contingency should a rehab have?
A common planning range is 10% for cosmetic and light work, 15% for medium, 20% for heavy and 25% for a gut, plus about 5% for pre-1950 homes or structural work.
Should I include permits in my rehab estimate?
Yes. A planning default is about 2% of hard cost, with a range of 1% to 4%. Check your local building department for the work you plan.
For education only. Not legal, tax, lending or investment advice. Loan programs and guidelines change and vary by lender; confirm current terms with your lender.