Rehab Success Depends on how quickly you Estimate the Cost of Big Three

Property Management Blog

If you are a real estate  investor, you will have to deal with rehabbing on a frequent basis. You can buy properties at bargain prices just because of their poor condition. But you can earn profits only when you are able to transform these properties through rehabbing. You need to be an expert in estimating the correct cost of repairs of three most important components of these properties. These are HVAC, roofing, and the electrical lines.

Beware, there are many other components

Every single property is unique in terms of its condition. There may be many other smaller components requiring upgrades in each rental property property. However, it is easier to make a quick estimate of these components to arrive at a fair offer to make to the seller. For the most part of the rehab, it is the above-mentioned components that matter the most to you as an investor. Let us understand a little more about these components in this article.


HVAC is a component that decides the level of comfort and convenience of the people living in a property. The presence of a heating and air conditioning unit that is working at an optimal level makes sure your tenants live in total comfort. You can measure the effectiveness of the HVAC of a property by knowing its tonnage.

Just remember that a ton of HVAC can keep 600 sq ft of living space cool. A ton of HVAC usually costs around $1500 for installation. If you are looking at a 1500 sq ft house, you know that it needs 3 ton of HVAC to keep it comfortable through heating and cooling.  This means you need to spend around $4500 for installation, venting, and ducting.


Roofing is another crucial component of a rehab. The age of the roof decides how robust it is to fight the might of the elements. If the roofing is in poor condition, you must quickly calculate the cost of installing a new roof. The measurement in roofing industry is square that equals 100 sq ft. You know the standard cost of replacement of a square of roofing with the cost of materials and the labor cost. Another good way of estimating the cost of roofing is to calculate it by adding up the living space in sq ft and multiplying it by 2. This means your cost of replacing the roofing in a 1500 sq ft home is about $3000. You will need more money to take care of the decking and the rotten wood.   The cost of roof repair may go up slightly depending upon the height of the ceiling, but you can take the figure of $3500 as an intelligent figure for roofing.

Electrical upgrades

If you are buying an old property, chances are that its electrical lines do not contain circuit breakers. You will find fuse boxes in these homes that need to be replaced by circuit breakers. This is because appliances and gadgets used at present necessitate circuit breakers. Upgrade to circuit breakers is not a tedious task if you have experienced electricians working for you.  A new panel costs around $1500. So, you can calculate the cost of electrical upgrade depending upon the units in the property you are purchasing.

As a rule of thumb, pay attention to the cost of these three components when estimating the cost of rehab of a property. There may be slight variations in costing depending upon the location of the property. But if you are not sure about your estimate, it is prudent to talk to your contractor before making an offer for the property.

If you’d like to talk more about property management, or you need help with Everest Property Management, please contact us at Everest Realty. 

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