Estimate rehab costs room by room and trade by trade, from a scope of work you write walking the house, priced from your own past jobs where you have them and from bids where you don't. Per-square-foot numbers and ballpark lump sums are for deciding whether to look closer, not for deciding what to offer.
The estimate is the number your offer hangs on. Come in $10,000 low on the repairs and the 70% rule hands you a maximum offer $10,000 too high, before anyone has swung a hammer.
Three ways to estimate, and when each is enough
| Method | How it works | Good enough for |
|---|---|---|
| Lump sum | One number for the whole rehab, from experience or one contractor's price for the whole job | Saying no from the driveway, unless it's a bid someone will sign |
| Per square foot | A cost per square foot × the house's square footage | Deciding a house is worth a walk-through |
| Line item | Every piece of work listed, measured and priced, then added up | Making an offer |
A per-square-foot number is only as good as where it came from. Say your last two flips, similar ranches with similar work, came in at $34 and $38 a square foot. On a 1,400 sq ft house that's $47,600 to $53,200: enough to decide the house is worth a walk. A number from a forum, another city or a different kind of rehab is a guess with a decimal point.
A lump sum is the same. From someone who's done dozens of houses like this one, it's a fair first number. From a contractor who walked it and will sign for it against your written scope, it's a price you can offer on, though get it broken into lines or you can't tell what's in it. From anyone else it's a hunch.
Before you make an offer, do the line items. It's the slowest of the three, and the only one that shows you what you're paying for.
Walk it room by room, and give each room a level
Take a tape, a flashlight, your phone for photos and something to write on. Start with the house itself: roof, structure, plumbing, electrical, heating and cooling, the outside. Then go room by room: the kitchen, each bath, each bedroom, the living areas.
Before you write a single line for a room, decide how far it goes. Three levels cover most rooms on a flip. They're labels, not trade terms, and each one takes in everything in the one before it:
- Finishes. The walls stay. Paint and trim, fixtures and lights, the vanity, mirrors and shower glass, hardware.
- Refresh. Old surfaces out, new ones in: tile and the cement board behind it, cabinets, counters, floors. The pipes and wires stay where they are.
- Gut. To the studs. The plumbing, wiring and framing behind the walls are open to change.
The level matters more than any one price, because of what it drags in. A gutted bath isn't a refreshed bath with more tile. Both get torn out and hauled off; the gut goes to the studs and brings new rough plumbing and electrical, maybe reframing, and usually a permit and an inspection. Where the work needs a permit, the International Residential Code, in use or adopted in 49 states, requires plumbing, mechanical, gas and electrical work to be inspected and approved before it's covered up. Your building department decides what needs a permit and how long you wait for the inspector, so call before you price the days. The order to renovate a house in shows where that inspection falls.
While you walk, write down what you can't see but suspect: a soft spot in the floor by the toilet, a stain on the ceiling under a bath, an old electrical panel, a sewer line nobody's put a camera down. Those don't go in the lines yet. They're the start of your contingency.
Write the scope of work before you price it
A scope of work is the written list of what the house gets: each piece of work, where it goes, how much of it and to what spec, plus what isn't included. You can't price "redo the hall bath." You can price this:
- Hall bath: demo to the studs, haul-off.
- New rough plumbing for the tub, toilet and vanity; a new circuit and a fan.
- 60-inch tub; cement board and waterproofing; 3×6 white tile surround to the ceiling, 70 sq ft.
- Drywall, vanity, toilet, fixtures. LVP floor, with the rest of the house. The window stays.
Hand the same written scope to every sub you ask for a price, and the bids compare: same tile, same square feet, same line about what's left out. Hand them "redo the bath" and you get three prices for three different bathrooms.
The scope outlives the estimate, too. Once you own the house, it's the list your budget is built from: the kitchen, the hall bath, the roof, each with its own number.
Price each line: quantity × unit cost
Every line is a quantity times a unit cost: square feet of tile, linear feet of cabinets, one water heater. A unit cost is what one unit of the work costs you, like a square foot of tile set or one door hung. Take it from the most trustworthy place you have:
- Your own past jobs, if you kept costs by the unit. Here's the catch in "use your past costs": if you finish a job with a total, a stack of receipts and a payroll number, none of that is a unit cost. You need the spend and the quantity on the same line. $7,560 to put down 1,200 sq ft of luxury vinyl plank (LVP) is $6.30 a square foot; $7,560 by itself is trivia.
- Bids, for the work you sub out. Priced from your written scope, by people who walked the house.
- Supplier prices, for the materials you buy. The actual product at a quoted price, plus whatever your installer says to order for cuts and breakage.
If your own crew does the work, the labor line is the hours times what an hour costs you, not the wage: the wage plus the employer's payroll taxes, workers' comp, insurance and paid time off. Price it at the wage and doing it yourself looks cheaper than subbing it out when it may not be. How crew hours become a real scope cost goes into why.
A worked house, line by line
Say it's a 1,400 sq ft, three-bed, two-bath ranch, and recent sales of fixed-up houses like it say it'll be worth $300,000 once it's done. That's its after-repair value, or ARV. The kitchen gets a refresh, the hall bath is gutted, the primary bath gets a refresh, the bedrooms get finishes, and the whole house gets paint, floors and a water heater. The unit costs are made up for the example; yours come from your jobs and your bids.
| Line | Quantity | Unit cost | Amount |
|---|---|---|---|
| Kitchen tear-out and cabinets, installed | 24 lin ft | $280 | $6,720 |
| Kitchen counters | 45 sq ft | $60 | $2,700 |
| Kitchen sink, faucet, appliances | 1 lot | $3,900 | $3,900 |
| Hall bath demo to the studs, haul-off | 1 lot | $1,400 | $1,400 |
| Hall bath rough plumbing and electrical, permit in the bid | 1 lot | $4,600 | $4,600 |
| Hall bath tile surround, board, waterproofing | 70 sq ft | $30 | $2,100 |
| Hall bath drywall, tub, vanity, toilet, fixtures | 1 lot | $3,950 | $3,950 |
| Primary bath tile out and new in, floor and shower | 110 sq ft | $26 | $2,860 |
| Primary bath vanity, toilet, fixtures | 1 lot | $2,600 | $2,600 |
| Interior paint (per sq ft of floor) | 1,400 sq ft | $3.25 | $4,550 |
| LVP flooring | 950 sq ft | $6.50 | $6,175 |
| Water heater | 1 | $1,850 | $1,850 |
| Light fixtures, switches, outlets | 1 lot | $1,600 | $1,600 |
| The lines | $45,005 | ||
| What you suspect: hall bath subfloor | 40 sq ft | $22 | $880 |
| What you suspect: the panel, if the electrician calls it | 1 | $2,800 | $2,800 |
| Before your cushion | $48,685 |
Two checks before you trust it.
Against your square-foot number. The lines come to $45,005 ÷ 1,400 = $32.15 a square foot, and $48,685 ÷ 1,400 = $34.78 with the two things you suspect. Your last two flips came in at $34 and $38 with their surprises in, so $34.78 is the fair comparison, and it sits between them. Had it come out at $25 or $50 a foot, one of the two numbers would be wrong, and it'd be worth finding out which.
Against a rule of thumb, loosely. ATTOM's quarterly flipping report notes that flipping veterans estimate rehab and other expenses together typically run 20% to 33% of a house's after-repair value: $60,000 to $99,000 on $300,000. That range carries more than the rehab, so add the rest before you compare. Here, $48,685 of rehab, the $14,000 of holding worked out below, and say $5,000 to buy and $24,000 to sell come to $91,685, about 31%. A total past the top of the range is a reason to recheck the levels you picked. Landing inside it proves nothing by itself.
Add the contingency and the clock
Contingency is money set aside for costs you can't pin down yet: the problems you suspect, and the ones nobody has found. Start it from the list you made on the walk: price the bad case of each thing you suspected. Here that's $3,680, the subfloor and the panel. Then add a cushion for what nobody saw. The first part has names on it, so when the subfloor turns out fine, you know exactly which $880 just came free.
Then the clock. The scope sets how long the work takes, and every day you own the house has a price: your daily holding cost. Say this one takes ten weeks of work, the rough-in inspection included, and you'll own the house 140 days from closing to closing. At $100 a day that's $14,000. It isn't a rehab line, but it belongs beside the estimate when you decide what to offer.
That makes each room's level a decision twice over. If the hall bath only needs a refresh, you drop the $4,600 rough-in line, some of the demo and, say, ten days: $1,000 less holding.
Make the next estimate easier
The estimate you can trust is the one priced from your own jobs, and that starts with putting the quantity next to the spend on the job you're running now. Firmabuilt keeps that pairing: budget lines with a measured quantity and real spend against them feed a Unit cost library, with the average, low and high per unit and how many lines and jobs each figure comes from. On Pro and Crew, the new-job questionnaire walks the same ground: the house's own pages (structure, roof, plumbing, electrical, HVAC, the yards), then each kitchen, bath and bedroom at Skip, Finishes, Refresh or Gut, with nothing ticked for you. Every task you tick is priced at your own rate, else your library's average, else a placeholder until you have one. The tasks add up to each scope's estimate, and the deal page shows what the scopes add up to beside your rehab line.
Questions
What's the difference between a rehab estimate and a budget?
The estimate is what you expect the work to cost, worked out before you buy so you can set your offer. The budget is the money you set aside for the job, the estimate plus your contingency, and it's what you track the job against once you own the house: what you've signed for and what you've paid, scope by scope. How to budget a house flip covers that half.
What is a scope of work for a renovation?
The written list of what the house gets: each piece of work, where it goes, how much of it and to what spec, plus what isn't included. It's what you price from, and what you hand every sub so their bids price the same job.
How much should rehab cost compared with ARV?
There's no right share; the house sets it. ATTOM's quarterly flipping report notes that flipping veterans estimate rehab and other expenses typically run 20% to 33% of the after-repair value. That's the rehab and the other costs together: holding, buying and selling as well as the work. Use it to check all of those added up, not the rehab by itself.
Can you estimate rehab costs per square foot?
For a first look, yes, if the number is yours: from your own past jobs, on similar houses, at a similar level of work. Someone else's per-square-foot figure doesn't know the things that move the price most: which rooms get gutted, the finishes, your market. Do the line items before you make an offer.