Understanding Rehab Cost Tiers
Light rehab ($15–25/sq ft): cosmetic work only—paint, flooring, fixtures, and cleaning. The structure, mechanical systems, and roof stay untouched. Medium rehab ($25–45/sq ft): kitchen and bath updates, some flooring replacement, minor electrical or plumbing work. Heavy rehab ($45–75/sq ft): full kitchen and bath gut, HVAC replacement, partial rewire. Gut rehab ($75–120/sq ft): strip to studs, new everything.
The 15% Contingency Rule
Experienced investors budget 10–20% above their line-item total for surprises: hidden mold, outdated knob-and-tube wiring, failing drain lines, or permit delays. A 15% contingency on a $60,000 scope is $9,000—money that rarely goes unspent on older properties. Skipping the contingency is the most common cause of fix-and-flip cost overruns.
Estimating vs. Contractor Bids
These estimates use national averages. Regional labor markets vary significantly: contractor rates in Manhattan can be 2–3× those in rural Tennessee. Treat this tool as a feasibility screen before you walk a property; get at least three contractor bids before committing to any acquisition.
Frequently Asked Questions
How accurate are these estimates?
These are ballpark figures for budgeting. Actual costs vary by location, contractor, and material choices. Always get 3 contractor bids.
Should I add a contingency?
Always add 10-20% contingency. Surprises (mold, termites, code issues) are common in renovation projects.