Cost & Expectations

The average cost of rehabbing a house can range anywhere from $20,000 to over $100,000. The baseline determining factors when pricing a rehab will be the condition, age and size of the home.

Specific tasks will play into this on levels as structural and foundation repairs or a new roof are typically the most expensive, followed by kitchen and bathroom remodels often being in the mid-range, ending with cosmetic fixes coming in on the low-end. The location and cost of materials may also influence the overall budget depending on market conditions.

Here is a rough breakdown of expense categories to keep in mind as you/we work through your home rehab budget:

✔ Materials – We create the checklist of rehab items in order to estimate material costs. These costs include new cabinets, countertops, appliances, flooring, doors, trim, paint, and any other materials or supplies needed to complete the project.

✔ Labor – The most essential part of any rehab project is a good team. This is where Troop Homes really stands out given our highly-skilled craftsmanship, our team’s extensive history in the business, along with our time-tested subcontractor and specialty tradesmen relationships (plumbers, electricians, HVAC, etc.).

✔ Permits – The permit process can influence the cost and timeline of a house rehab greatly. Making sure the appropriate permits are in place at the right time ensures that project timelines are met, and subsequently, the overall budget of the project isn’t put at risk.

✔ Staging – In many cases, once the rehab is complete the home needs to be staged for professional photography. This should always be accounted for in the initial budget to avoid being caught off guard by extra expenses if the home will be going up for sale following the rehab.

✔ Ownership Costs – We remind all of our clients not to forget about holding costs when considering an overall rehab budget. The costs of utilities, property taxes, possible lender fees, and any additional upkeep still accrue during a rehab…and if it is subsequently going up for sale, through the selling period as well.

Personal Home Rehabs

A personal home rehab is exactly what it sounds like…renovating a property for personal use. In these cases, you should be hyper-focused on making the improvements that best suit you and your lifestyle, whether it be upgrades in aesthetics or functionality…while always looking to boost property value.

A lot of people consider buying an older property and rehab it into their dream home. If this is you, there are a few things to keep in mind:

✔ Location – Location is the golden rule of real estate and definitely applies here. Be sure to keep in mind things like average home prices in the neighborhood, the quality of the school district, proximity to restaurants and shopping, as well as access to public transportation. Also, make sure you take a look to see if the overall neighborhood is well-maintained, and see if individual homes are well-kept. Buying the worst house on the best block you can afford normally pays off quite well.

✔ Layout – Many of the older homes are sectioned off into several more confined rooms, so keep in mind whether or not this type of layout will work for you. While it is certainly possible to knock walls down and rearrange floor plans, it can sometimes really add to the renovation expense…or in some cases may even be impossible due to structural factors.

✔ Condition – The condition of a house can vary greatly, from a house simply needing a cosmetic makeover, to a situation where a total gut rehab would be required. If the goal is to minimize renovation costs, you should be looking for a home with ‘good bones’. Houses that fall into this category have a solid foundation, a solid roof, no major structural damages, quality original construction, and a good floor plan with a coherent design.

✔ Impact – Depending on the size of the house and the scope of the renovation, a rehab project might last anywhere from a month to (in rare cases) more than a year. Just be aware that if you and your family are going to be living in the house through the renovation, this may have a significant (and possibly disruptive) impact on your lifestyle. On the other hand, it can also a great learning experience learn the ropes about how a rehab works…both about defining scope of work and even seeing project management in action.

Investment Home Rehabs

✔ The Flip

A straight flip is a strategy involving purchasing a house, renovating it, and then selling it as quickly as possible for an expected profit. This strategy requires a working knowledge of the rehabbing process, the industry, and the current real estate market conditions.

And, while almost all factors of a personal rehab still apply with a flip, there are a couple main factors that come into play beyond that of the personal rehab…including:

• Cost – A successful flip often lies in the purchase price vs. a well-conditioned home of similar nature….namely, location, size and amenities.
• Timeline – It’s extremely important to rehab in the shortest amount of time possible to minimize holding costs (the costs of owning and operating the property while the rehab is taking place).

✔ The Rental

A rental rehab obviously involves renovating a property to then rent it out to tenants. Many investors start flipping houses before beginning to add rental properties to their portfolio, as it’s a great way to start building steady, passive income.

This process is almost a carbon copy the flip scenario and includes the very same priorities with regard to price entry, project costing and importance of timeline. The market conditions analysis simply comes from a slightly different perspective…where you’re looking at average rents vs average sales values, and also tracking rental inventory vs sales inventory.

➥ Investment Home Rehabs are one of Troop Homes specialties, and really allow us to stand out given our great team, reliable timelines, and most importantly, our deep experience in designing, project planning, scheduling out, and completing both flip and rental rehab projects.

Historic Home Rehabs

Historic homes bring a unique set of questions, decisions, and goals with them…the main decisions coming down to the question’s between restoring vs rehabilitating.

These decisions are sometimes driven by personal choice, and sometimes it really just comes down to item or materials availability. Regardless, these decisions have differing levels of impact on the house’s finished character, project cost, and the time the project takes.

Here is a list of factors we think are important to keep in mind when working through your Historic Home Rehab:

✔ Factors – Identify factors that will shape the decision making process. This includes understanding the home’s history, architecture, and present condition of finishes, materials, and systems. You should also consider your household’s lifestyle and what personal needs the finished house must accommodate.

✔ Regulations – Look into local historic district designations, local building codes, property insurance, as well as looking into other financial and regulatory considerations.

✔ Details – With regard to the home’s history, try to understand any important events that may have occurred there, or if any other scenarios have historical significance. This may impact your decision to lean harder towards restoring all or certain sections of the house to a specific time period to help preserve and interpret that history.

✔ Form vs Function – When real historical significance exists, that can make it more difficult to draw a line between preserving that history (restore), and at the same time, making the home useful and functional for contemporary living (rehab). In the end, a ‘complete restore’ is very rare, as most people have a real hard time living without modern electrical, mechanical, plumbing systems, a modern kitchen, and other elements typical in modern-day homes.

✔ Craftsmanship – When considering the restore portion of the project, it’s important to consider the design, craftsmanship, quality, and materials of the original house as well as any recent changes. Most historical rehabbers really try to prioritize making interior and exterior changes of the same or better quality than the original house, even when forced to implement different styles or materials based on uncontrollable factors.

✔ Alterations – If the situation calls for a structural alteration or even a new addition, consider its scale, dimensions, and proportional balance in mass. It’s also really important to use colors, textures, materials, and most importantly…an architectural style similar to those from the original time period of the home. That said, it is still important to be able to tell additions apart from the original home to ensure its history is transparent.

✔ Coherence – When integrating modern technologies and life styles into a historic home, err on the side of caution. Make an effort to keep changes compatible and non-intrusive with the house’s original style and design…don’t let upgrades or alterations compromise the house’s historical or architectural significance.