Starting a house rehab project can be a tall task, even for experienced homeowners. The wide scope of work and costs can quickly run out of control if you haven’t carefully planned out the entire project.
A house renovation is most rewarding when a clear and concise strategy has been formulated. Premium appliances or fixtures do not always lead to greater returns. Whether you are rehabbing a home you just purchased or as an investment property, learn more here about how to plan a house renovation that’ll pay off for years to come.
How to Begin the Process
To kick things off, you’ll will need to brainstorm a game plan. How much work needs to be done, and how much are you willing to pay for it? A little patience can go a long way. Learn more about the planning process in the sections below.
Make A List of Everything That Needs to Be Fixed
Your first step should involve you creating a document or tracking system for your project. An online spreadsheet program, such as Microsoft Excel, is an excellent tool for this process because you can add columns to the sheet showing the anticipated expenses for each item you plan to replace or repair. Most of the math work will be made easy too, since calculations can be performed in a matter of seconds thanks to functions in the spreadsheet program.
Here is a suggested column layout for your inventory & expenses sheet:
- Budget Cost (Each)
- Budget Cost (Total)
- Actual Cost (Each)
- Actual Cost (Total)
- Difference (Budget Cost Minus Actual Cost)
You do not need to worry about adding specific items and expenses yet. You will sit down and create your budget after walking through the house and writing up a project plan.
Which Permits Do You Need for A House Rehab?
Local building codes will often mandate that you need to obtain construction permits to remodel a house. Be sure to visit the local code enforcement office to inquire about any permits that you may need. Every municipality is different, permits required in The Bay Area for example, may be much different than in other parts of the country. Failing to obtain the proper permits can result in hefty fines in many municipalities. Add permits and their associated cost to the inventory spreadsheet that you already created.
Get Quotes from Local Remodeling Companies
The best way to do this is to get at least three bids from contractors after giving them detailed specifications about your project. By having a specific game plan, you will have a more accurate read on what the final costs of the project may be.
Even if you plan on doing a DIY house rehab, it wouldn’t be a bad idea to receive project quotes from at least a few different remodeling contractors. Even if you have experience rehabbing houses, there are sure to be at least some stages of the rebuild that do require a licensed contractor, such as electrical work that should only be performed by someone with the proper training. Working with a good remodeling contractor will help the process immensely.
This will help you determine which stages of the house rehab would be worth delegating to a knowledgeable contractor and which could be performed as a DIY project. It’s also worth noting that experienced home remodeling may have access to material suppliers that most homeowners don’t necessarily know of. These suppliers may sell items to building contractors in bulk at a lower price than what you would pay at the leading home improvement retailers.
Create A Project Plan
To complete your project plan, you will need to know which parts of the home to take care of first. This way, there will be continuity throughout the rehab process, and you won’t have to retrace your steps.
The American Apartment Owners Association created a helpful checklist for rehabbing a house from start to finish. The following list has been adapted from theirs, with recommendations along the way on how to get the best value out of your project.
Stage 1: Begin with Demolition and Trash Removal
Once you have rented a roll-off dumpster and it has arrived on site, the rehab process can begin:
- Remove items that are damaged beyond repair or otherwise need to be replaced.
- Clear out any debris within the home.
- Tear out any flooring, paneling, or wall materials that need to be replaced.
- Remove any damaged furnishings and appliances, if there are any in the house.
- Remove any broken plumbing fixtures.
- Clean up the exterior of the home as well, trimming back shrubs and bushes.
Save By Renting Out A Dumpster
One of the costs that you’ll need to add to your budget is trash removal. Rehabbing a house produces quite a bit of trash, including floorboards, drywall, and roof shingles, among other materials. To efficiently dispose of these materials, you will need to rent out a roll-off dumpster.
You have probably seen these in your neighborhood before anytime one of your neighbors had their roof redone. You can save money by renting out a dumpster that is appropriately sized for the scope of your project. If the remodel covers a large area, then you will undoubtedly benefit from ordering one of the largest dumpsters available.
Stage 2: Windows, Roof & Siding
After the demolition and initial cleanup steps, you are encouraged to start looking at the windows, roofing, and siding. These materials may take a while to receive after ordering, so be sure to take care of these early on in the house rehab process.
The roof is critical to start with because you need to be aware of possible leaks that may cause damage to the new interior. By starting with the exterior, you will also be able to attract the attention of passersby. If you intend on flipping the house, the locals will be well-aware of the fact by the time you post a “for sale” sign in the front yard.
How to Save Money on Windows, Roofing & Siding
If you are renovating an older house, keeping the current windows is recommended unless they truly need to be replaced. Wooden windows last longer than modern vinyl options, and older homes likely have other issues that will negate many of the efficiency benefits of insulated windows. Instead, opt to add new putty or weatherstripping around the window to seal off escaping air.
Consider installing light tubes rather than adding windows if you find that a spot in the house has a dark area. The light tubes are a more affordable alternative to insulated windows. These can be slipped between roof rafters to funnel natural light down towards the floor below.
Stage Three: Plumbing, Heat & Air
Not addressing any plumbing issues early on can be a big mistake. By ignoring the plumbing, you may have to remove newly installed sheetrock when you make the unfortunate discovery the pipes are damaged. You certainly do not want to have to replace the flooring that you just bought.
A working heating and air conditioning system is also necessary for much of the interior work to be performed correctly. The finishing and painting of the walls will not be practical without a functional HVAC system. Also, address any issues with the electrical layout at this time.
How to Save Money on Plumbing, Heat & Air
Heat and air systems are among the most important features of a home to repair or update. A faulty air conditioner will promote mold growth, which will just lead to further costs down the road. Look for appliances carrying Energy Star ratings to save on overall energy costs.
Stage Four: Framing
If you have any rotting or damaged walls, this is the part of the process where you will address them. At this stage, you might consider adding a finished basement to the home. This creates more living space and will be attractive to prospective buyers.
Stage Five: Drywall
Hanging and finishing new sheetrock is a stage in the rehab that you are encouraged to hire a contractor for. Drywall sheets are bulky and heavy, and challenging to handle without mechanical lifts. Contractors can handle this arduous task in a matter of days, depending upon just how much drywall you need to replace.
Keep this in mind when you are budgeting your project. If things aren’t too ugly, you may end up just skimming and patching the walls. The advantage of going with new drywall is that it’ll freshen up an old house and make it look brand new.
Stage Six: Painting
After all the drywall is checked and accounted for, it is time to paint the walls. You’ll start with a coat of primer. There may be some flaws in the sheetrock that won’t be visible until there is paint on the walls. Add two more coats of paint before you are finished. There’s no reason not to add paint to your checklist, especially since paint is affordable.
Cosmetic maintenance like the paint job will significantly affect how the rehab project is perceived, as this is one of the first things that anybody who walks into the home will notice. Include window trims and other exterior surfaces in the painting stage.
Stage Seven: Installing New Plumbing Fixtures and Cabinets
It wouldn’t be a bad idea to take your kitchen and bathroom dimensions to your local home improvement store. This will help you determine which fixtures and cabinets will fit in the house. With the walls already being painted, you won’t have to worry about having to work around new fixtures and cabinets.
Saving Money on Kitchen Renovations
Renovated kitchens have only been shown to add 5-15% of added value to the price of a home. Granite countertops and professional-grade countertops may not be worth it since you are only encouraged to spend 5-15% of the home’s value on the kitchen alone. You can save by purchasing laminate or vinyl flooring and laminate countertops.
The last piece to add to your renovation should be a new carpet, where needed. This is not a step you want to skimp out on since carpets are perhaps one of the more noticeable features of a home. At this stage, you may also consider updating the light fixtures to include more modernized options, including the ceiling fans.
Sit Down and Create A Budget: How Much Does A House Rehab Cost?
As you create an inventory and brainstorm a project plan, you will be ready to create an estimated budget. In this step, you would fill out the budget cost individually for each item in your list. Below you will find a table with rough estimates on the average cost to fully remodel the rooms of the house.
|Portion of House||Average Total Cost|
The numbers above are simply estimates. After you fill out your inventory spreadsheet, you may well end up with a tally above or below the $64,049 figure. The final cost depends largely
upon the quality and quantity of the replacement materials that you need. The cost estimate also doesn’t include exterior renovations, which are especially important if you aim to flip the house.
How to Rehab A House on A Budget
Staying on budget can be difficult. Or perhaps the cost estimate that you created in your inventory sheet is way higher than you thought it would be. Either way, you should be happy to know that there are many ways to keep your actual costs lower than your budget costs.
The following are some helpful tips on how to rehab a house on a budget:
DIY When You Can
There will certainly be some stages of the process that will require an experienced contractor, but you are encouraged to take the DIY approach whenever possible. You will save money by not having to pay for labor on fairly straightforward projects that you might as well do yourself.
Use Recycled Materials
When you start gathering materials for the project, you might look for products that are made from recycled materials. Using these can help you save money. This is also a good way to score high marks when it comes to engaging in sustainable building practices.
The use of recycled building materials does come with one caveat: most contractors don’t want to use them. They don’t want to deal with the associated liability resulting from a product that may be untested or unproven. Recycled building materials may also hurt the home’s resale value, so you may consider treading lightly unless you think that you can market to a specific niche of homebuyers emphasizing sustainability.
Make the Most Out of The Space You Have
Instead of trying to expand the amount of freely available space, look to maximize what’s currently available. Busting through walls to free up space can often be a costly and unnecessary process.
- Replace shelves with cabinet-height pullout drawers that add three or more horizontal layers to your cabinets.
- You might consider adding wall-mounted storage to your kitchen.
- Look for space-saving furniture such as ottomans with interior storage instead of coffee tables.
- Add floating shelving to your bedrooms.
The list goes on, but you get the point. Why go through the trouble of knocking down walls when you can simply just add pullout cabinets and wall-mounted storage to free up space?
How to Make the Most Money Off of a House Flip
If the end game is to flip the house for a profit, you can take a big bite out of the renovation costs by focusing your budget on projects that have been shown to deliver the most significant profit. An investor needs to constantly remind themselves that they need to design a sellable house, which may not be in line with their personal preferences.
Here are the house renovations that lead to the most extensive returns later on:
- Adding a wood deck
- Replacing an entry door with a new steel door
- Doing a minor kitchen remodel (Such as increasing the capacity of your cabinets with cabinet-height pullout drawers)
- Adding an attic bedroom
Selling or refinancing the property as soon as you have the work done is a good strategy since renovations have a somewhat short-lived effect on a home’s value. New kitchens, for example, cannot be relied upon to add value to the house after they have already been in place for three years.
The first step in any successful house renovation project is a master spreadsheet of all the items you plan on replacing or repairing, and how much you are willing to spend for each item. The average house rehab can cost roughly $64,049, but the good news is that there are plenty of opportunities for savings to be made along the way.
One of the surefire ways to save money on a house renovation is to avoid breaking down walls if you don’t have to. Cabinet pullout drawers, for example, allow you to make more efficient use of the space that you already have.