What Will Rehabbing That House Really Cost You?

What Will Rehabbing That House Really Cost You?

The cost of rehabbing a house

Are you interested in rehabbing a newly purchased property? Or perhaps you are looking to rehab your personal residence? Either way, the cost of rehabbing a house is determined by many factors including the cost of labor, insurance, tax, permits, materials and many other hidden costs. To estimate the exact cost of repairing a house, you need to determine what needs to be fixed, which may be difficult. We wanted to make this process easier for you so we broke things down into a few simple categories that will help you determine what rehabbing that house will cost you. This article will help you decide what rehabbing that house may really cost you?


First, you need to determine exactly what needs to be repaired. Take time to investigate the property in detail. How many windows, doors, electric fixtures, kitchen appliances, etc. will you need to make your renovation successful? Write down the materials you will need and take the list to your nearest home repair store to get an estimate of the bill. Always round up to the nearest whole number. It’s always better to estimate too high than estimate too low. Now that you have the materials covered, you should ask yourself, can I rehab this house myself? Or should I hire help?


Estimating labor costs is where things can get tricky. If you feel confident in your ability to do most of the repairs yourself, you won’t need to worry about labor costs. However, we do suggest you look into hiring a licensed electrician, plumber, and roofer since those repairs can be more difficult. If you feel as if you need even more help, hire a general contractor. Many general contractors have their own crew of laborers who have specialized skills in different categories. The contractor can charge a fixed price or a “time and material” price. For a fixed price, the contract will bid your project for a specific price. The fixed price will often increase due to unexpected changes to your project, so don’t be surprised if you are billed a higher rate than you were told! Time and material cost requires more work on your end. You will need to establish a schedule of hourly charges, a mark-up fee for the laborers, and a mark-up fee for the materials. In general, a contractor can cost anywhere from 5% to 25% of the total project cost.

Insurance, Tax, Permits

For a proper and professional house rehab, you should pull permits for the specific work you will be doing in the home. Obtaining permits will prevent unwanted fines from home inspectors. Also, if you don’t pull permits, you are susceptible to legal ramifications. The national average for a building permit is $908. If you choose to hire a contractor, you should make sure they show proof of disability and liability insurance. However, you will often come across workers who aren’t insured. Therefore, ask your insurance company about a “landlord-type” insurance policy. Doing this will cover you for any injuries on site. It is also essential to carry homeowners insurance on the home you are rehabbing. According to the Federal Reserve Bureau, the average annual cost of homeowner’s insurance is anywhere between $300 to $1,000. Unfortunately, rehabbing a home is not an expense that can be deducted from federal taxes. One way to lower costs of taxes is to install qualified energy generating systems that will not only lessen the amount you have to pay but will also improve the quality of the environment.

Hidden Costs

There are many hidden costs involved when undergoing a renovation. An important hidden cost that should be attended to immediately is the many health hazards that you are bound to run into. Lead-based paint, diesel exhaust, mold, asbestos, and dust are some of the many health hazards that can have a serious effect on your health and the workers’ health. Be sure to review regulations and do an initial screening of the home before you start renovations to prevent damage to yours and others health. An additional hidden cost that is often overlooked is the emotional strain that can affect not only you but the people around you as well. The best ways to avoid emotional strain during a renovation is to be realistic, budget well, and try not to sweat the small stuff. Although hidden costs are unavoidable, understanding the regulations and rules to overcome them will make your renovation process go much smoother.There are many different factors at play whenever you rehab a house. Materials, labor, insurance, permits and hidden costs are all factors that determine the overall outcome of the renovation. With these factors coupled with the unique aspects of the individual home you are rehabbing, there is not an exact cost we can estimate for you. Although, we can tell you that rehabbing your house will cost you time, money, and sweat. Are you up for the challenge?]]>

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