Rehabbing an Old House Step 3: Estimating
This installment follows Step 2: Selecting
and Rehabbing Manual Step 1
So, you've found a place that you like and that's in decent shape. Time to make an offer, right? Not so fast! You've got more work to do.
You can't make a responsible offer until you know how much money it's going to cost you to make it livable or the way you want it. Also, if you're getting a rehab loan, you're going to have to have good estimates for the bank too, even for things you intend to do yourself.
There's more to it than you'd think. You don't want to under-estimate, either, as you'll end up with a place that you're paying a mortgage on but that hasn't been painted or carpeted or which ends up looking crummy because you had to cheap-out on your finish.
First off, you're going to have some demo expense. If it's a major gut job, don't do this yourself. It's hard, it's nasty, and it's dangerous, and you don't save all that much money. Typically, demolition will run $1.50-$2.50 per sq. ft. You may have to add in dumpster expense ($250-$700) and any materials.
You're also going to have some soft costs like permits, closing costs, and architect (though if you aren't changing things much, you may not need a pro).
You'll need to secure the building from the elements and from miscreants. That means get several roof estimates, as well as estimates for windows and doors. New windows should be ordered a bit later in the process if you want to avoid potential damage, but it's nice to have a warm, safe place. Windows can be expensive, though if you have more time than money, repairing them is not a huge deal. There are many books on this. Doors are easy to find on Craigs list, and don't forget any basement access door that might need to be replaced.
If the electrical system is old knob and tube you're going to want to replace it. It's dangerous. Get several estimates from credible electricians. You can probably do a good bit of wiring yourself but you're going to want to bring in a pro to hook things up to the breaker box and to consult with you. Do your homework and remember that electricity is dangerous.
If the plumbing is iffy (and you'll want to have a plumber check it out if you don't intend to replace it), you can do much of the PVC work yourself, but a good plumber can move mighty quickly. Also, you pay a plumber for what he knows more than what he does.
If the HVAC system is old, you'll probably want to replace this, too. Get a couple estimates. You can find cheap furnaces sometimes, but most of the time, your HVAC guy can get this stuff more cheaply than you can.
Study the foundation from the outside and look for any potential drainage issues. You'll want to address those quickly and some might require a pro so don't forget to estimate for that, if necessary.
What about insulation? You'll probably want to add insulation. Much you can do yourself but not all. Will you be using spray foam? Some you can do yourself, but others require professional help.
If you're going to have the walls opened up, you might want to consider a central vac system. They aren't too expensive, and you can do it yourself, but they still need to be budgeted for.
You'll want to visualize the place as if it were done and list things you'll need to price out. Drywall and all that goes with it (mud, tape, screws, etc.). Trim (doors, windows, baseboards). Window treatments. Primer and Paint (remember, don't skimp on the paint--labor is the expensive part--you don't want to paint any sooner than you have to). Stains. Electrical fixtures.
Will you be sanding the floors or covering them over? Get a bid on sanding, unless you've had experience or have an option to practice somewhere. Don't forget carpet or any laminate flooring too.
Don't forget appliances. You may need new washer and dryer, oven, stove, fridge, range hood, and the like. Maybe you already have these, but if not, you'll need to add this into your estimate.
Cabinetry for bathrooms and kitchen? That can get expensive, but it can also be done reasonably affordably. Don't forget drawer pulls and handles too. Ikea has some great planning tools, if you want a starting place. Just don't forget to get estimates.
You're going to want to spend some time and money on landscaping too, in all likelihood. If it's more than a few pansies, you'll want to include a budget for that too. While you're outside, make sure that you don't need to paint.
You'll need some tools, too. A rehab should NOT be an excuse to go on a buying spree at Home Depot. Some tools you'll need and you should buy them new. Other tools you may not need, or you may not need to use much. Those are tools that you might want to borrow or rent. Other tools you might want to snag off Ebay, Craig's List, and even pawn shops. Don't forget yard sales. You can blow $2000 in a heart beat buying new tools and you don't have to. Plan early, be creative, and accumulate the tools that you'll need. There are books on this, including the one recommended in Step 1, so we won't belabor the issue, but rather offer the things we KNOW you'll want to have.
(Pretty Much) Imperative tool list:
Bits: Spade, Masonry, etc.
Wide, 25' Tape Measure
Steel Toe Work Boots
N100 or P100 Respirator
Don't gloss over all the nails and screws and fasteners and glue that you may need. This, too, adds up.
Once you've got your budget, you're going to want to add 10%-15% contingency. Plan on discovering things that you have to do or things that you'll really want to do. Plan on time delays. You may want to have two sets of estimates, one for the bank and one for your own use, especially if you're going to be doing a lot of work yourself or bartering with tradespeople. In any case, once you have your estimates, then it's time to make your final determination and make an offer. Even then, you may want to arrange financing first.