- 3 Free Rehab Cost Estimator Tools
- Why Are Rehab Cost Estimators Important?
- Scaling The Rehab Cost Estimation Process
- Common Property Items That Will Need Rehab
- Red Flags To Watch For When Estimating Repairs
- How To Pick Which Method For Home Repairs
One of the biggest mistakes you can make as an investor is buy an investment property before estimating the repair costs.
If you do this - you're rolling the dice and hoping that your purchase was a good investment.
Good investors don't hope. Good investors let the numbers guide their decisions. This post is a deep dive into home rehab costs, plus two free tools you can use to estimate repairs.
Estimating repairs is one of the most fundamental tools in an investor's tool belt - but it's one of many. For a deeper dive into all the investing basics, check out our guide to the fundamentals of real estate investing.
List Of 3 Free Rehab Cost Estimator Tools
- Rehab Cost Calculator
- Property Repair Estimate Template
- Hammerpoint Rehab Cost Estimator (free 1-week trial)
Why Are Rehab Cost Estimators Important?
Once you've spotted a potential new deal, one of the most important things you can do is assess the current value of the property, the necessary repairs, and the after repair value.
Doing this will give you a better idea of what you should buy it for, what you should be able to sell it for, and how much you can put into it for repairs while still making a good profit.
Rehab cost estimators matter because, without a clear understanding of how much work a property needs, you don't know if you're getting a deal or a money pit.
Can Investors Estimate Property Repairs Without Tools?
Without tools, most investors will either use a template like the one above, or bring in a contractor to provide repair estimates. The problem? Not only is bringing in a contractor expensive, but it does not scale. This is really only a good option for investors who are looking to purchase their first investment property.
But even then - you'll need the contractor to perform repair estimates on multiple properties. You're already coordinating property inspections (whether you're doing that personally or virtually is up to you) - which should give you all the information you need to estimate repairs.
Do you really want to coordinate contractor visits and estimates on top of that?
Performing Property Rehab Estimates At Scale
The two free tools above are great ways to get get started. But if you're serious about scaling your ability to estimate repairs down to the last detail, you need a professional tool like the Hammerpoint Home Repair Estimator.
How Realeflow's Repair Estimator Works
Realeflow's Hammerpoint software allows users to create accurate repair estimates on the go using their laptop or tablet. This tool systematically guides investors on their inspection of necessary repairs including exterior, interior, and mechanical features of the property.
For investors - this means they can complete an entire repair estimate in a single walkthrough.
Out the gate, the Repair Estimator is equipped with hundreds of default repair items and costs, including common repairs and nationwide averages for pricing.
It's also super easy to add new repair items and, if you know it, to edit pricing to reflect the true costs in your area.
Just a few clicks and the Repair Estimator creates a detailed report, calculating individual costs as well as the grand total for all necessary property repairs.
What Items Should You Rehab On Your Property?
This is where it's really easy to go into the weeds, and why you probably want a repair template to guide you in this process. But once you've got your system down, I wanted to share with you a few things that almost always need addressing when factoring in rehab costs.
First impressions are everything, so when a potential buyer makes their way onto your property, you want to make sure they’re not being met with an unkempt yard of weeds, dead grass, leaves, etc.
Taking the time to give a little TLC to the yard, garden, and flower beds goes a long way with a buyer who is trying to picture themselves calling your property their new home.
2. Front Door/Entrance
An inviting entranceway is an extremely important precursor for a buyer and sets the tone for their feeling towards your property.
Don't overlook the value of investing in a quality front door and doorknob. You don’t want a potential buyer’s first impression to be skewed because the doorknob is loose or the door doesn’t close properly.
A fresh coat of paint on the front door also gives the house a well cared for feeling.
3. Crown Molding
This is a great investment to consider for dining rooms and living rooms that’s rather inexpensive and easy to do.
If your budget allows for it, this kind of investment is a subtlety that will give your property a refined, distinguished look.
Lighting is critical, because it doesn’t just set the mood, but the overall tone and feel of a property. Old lighting fixtures can make a property feel outdated, and will give the seller the impression that it needs a lot of work.
Doorknobs and handles may seem minor, but they also make a big impact and are cheap and easy to update. Loose doorknobs and handles can create an unsteady feeling in the subconscious mind of a potential buyer.
Protip #1: When it comes to fixtures, continuity is key.
Doorknobs and handles, light fixtures, and cabinet hardware should all have the same finish. If you’re going with brass for the knobs and handles, make sure the light fixtures and cabinet hardware are also brass.
Pay attention to the current trends and the neighborhood where the property is located. Brass lighting and fixtures may suit an older neighborhood just fine, whereas you will probably want to update these to brushed nickel in a newer, younger neighborhood.
These types of details play a huge role in the mind of a potential buyer.
A good rule of thumb with interior paint is to make sure the wall colors contrast with the color of the trim to give the room a nice pop! Your best bet is to stick with neutral colors - as most of the time, people won't buy a property because of neutral colors, but they may definitely not buy the property if they're put off by the color scheme.
Red Flags To Look For When Estimating Repairs
Protip #2: Don’t let the appealing design features of a property distract you from crucial money pit indicators.
Protip #3: If your target property is far away or you don't have any experience with repair estimates, it's worth getting boots on the ground to perform a property inspections in order to take a closer look at potential problems.
There is a fine line between investing in a fixer-upper and a property that needs more work than it’s worth. Knowing what to look for and exactly what repairs will cost removes all the guesswork out of buying and helps with lender and seller negotiations.
Before you invest, be mindful of these red flags:
Red Flag #1: Exterior Features
- Crooked windows or doors are signs of an unstable foundation; one of the most costly repairs to make.
- Look at the roof. Any sagging areas are indicators of a poor or damaged support system typically caused from snow build up or general wear and tear. Roof lines should be straight with no waves or dips.
- Look for exterior foundation and stress cracks and, if you find them, you might want to move on.
Red Flag #2: Structural Integrity
- Once inside, check out the basement first; the foundation of a property is the most important component.
- The walls, ceiling, and floor show the quality of the construction. Any cracks, stains or leaks suggest costly potential repairs.
Red Flag #3: Problems Out In The Open
- Keep on eye out for any cracks or gaps on hard-surface flooring, drywall, or near windows, as these are surefire indicators of an unstable foundation.
- Horizontal/Angled cracks call for a thorough inspection as these signs warrant foundation shifting or possible water damage.
- Ceiling stains mean the problem is above that point from a leak in the roof or cracks in piping.
- Check for water damage, dampness, mold, or mildew throughout the house, but especially in the basement, bathrooms, and kitchen. Don’t forget to check the caulk around sinks and seals around windows for leaks.
Water damage issues can be among the most costly to repair and should be taken very seriously.
Red Flag #4: Major Systems
- Before you leave the basement, locate the heating, cooling, plumbing, and electrical units. These systems can be extremely costly if they need to be updated based on their condition or age.
How To Pick Which Method To Use For Property Rehab Estimates
Use the repair template/rehab tool estimator if...
- You have some prior experience in home repairs
- You have only one or two properties you need to estimate repairs for
- Your target properties are physically close to each other
Use Hammerpoint or similar repair estimate software if...
- You're looking at two or more properties
- The properties you're looking at are not geographically close to one another
- You don't want to source, vet, hire and coordinate contractor visits to each site
The Repair Estimator saves you invaluable time and covers every nook and cranny of each property so you have a true vision of the costs associated with the necessary repairs.
Knowing how much you will have to invest on top of the asking price for the property will help determine if the overall investment fits your budget, and if it's a "go" or "no-go" for you.
Using a rehab cost estimator like Hammerpoint is one of the easiest ways to ensure your repair estimates are on point and that your investment is good to go.
You can try Hammerpoint free, along with the rest of Realeflow's tool suite, for one week. Grab your free week trial of Realeflow here!