Property Rehab Budget
So you’ve found a 3-2-2 in a trendy area with a good school zone. Now you want to know how
much to offer. The only way to figure that out is by estimating the repair cost. Learn how to estimate big ticket items when preparing your property rehab budget.
Number 1: Does it need a roof?
This is an easy answer. Weathered or broken shingles and decking is fairly easy to spot from on the ground. Where costs inflate is the number of pitches and angles in the roof, and not the total area to replace. There are factors which bloat the cost of repair, such as cedar shake decking, because it’s labor intensive, outdated, and a fire hazard. A good inspection should help you determine the presence of cedar shake.
Number 2: Is there foundation damage?
Diagonal cracks near windows and doorways are a prime tell of foundation problems. Large cracks and uneven concrete in the driveway is another tell. Slab foundations require breaking into the concrete and inserting piers to raise uneven portions of the house. Luckily, most foundation companies offer transferable, lifetime warranties.
Number 3: Cast Iron or Clay pipes?
Homes built before 1979 are at risk for cast iron or clay pipes, and lead paint. Cast iron rots and clogs over time. If you have foundation damage, you can almost guarantee those cast iron pipes have broken. Clay pipes just dissolve and are susceptible to root penetration. When that happens, your sewage quickly backs up. Fresh paint or new dry wall will often satisfy housing requirement codes if you’re looking to rent.
Number 4: H-Vac and Water Heater.
Water heaters more than 10 years old are at greater risk of giving out. So while it might not be an immediate priority, know it might be an issue in 2-3 years. H-Vac systems now-a-days are a godsend, but that doesn’t mean they’re any less expensive than a roof or plumbing. If they’ve not been updated since Obama first took office, or if the previous occupant didn’t know what filters were, that’s another item that needs fixing.
Understanding the need for these costly repairs is essential for your property rehab budget. Don’t be surprised. Be prepared.
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