Rehab Costs (Renovation Costs)

Rehab costs (also called renovation costs or repair costs) represent the total investment needed to bring a property from its current condition to the desired end state — whether that is retail-ready for a flip or rent-ready for a rental. Accurately estimating rehab costs is one of the most critical skills in real estate investing, because underestimating repairs is the number one reason flips lose money.

Categories of Rehab Costs

Rehab expenses generally fall into these categories:

Cosmetic (Light Rehab) — $10–$25 per square foot. Paint, flooring, fixtures, appliances, landscaping. Typical budget: $15,000–$35,000 for a 1,400 sq ft home.

Moderate Rehab — $25–$50 per square foot. Kitchen and bathroom remodels, new HVAC, roof repair, window replacement, updated electrical panels. Typical budget: $35,000–$70,000.

Heavy Rehab — $50–$100+ per square foot. Foundation work, structural modifications, full gut renovation, additions, mold remediation. Typical budget: $70,000–$150,000+.

Building a Rehab Budget

A reliable rehab estimate starts with a detailed scope of work (SOW) that lists every item to be repaired or replaced. For each item, estimate materials and labor costs based on local rates. Common line items include:

Kitchen remodel: $8,000–$30,000 (depending on scope). Bathroom remodel: $5,000–$15,000 per bathroom. Flooring: $3–$8 per sq ft installed. Interior paint: $1.50–$3 per sq ft. Roof replacement: $5,000–$15,000. HVAC replacement: $4,000–$10,000. Electrical update: $3,000–$8,000. Plumbing: $2,000–$8,000.

Always add a contingency of 10–20% above your itemized estimate for unexpected issues — especially on older properties or heavy rehabs.

Impact on Deal Analysis

Rehab costs directly affect your Maximum Allowable Offer. Using the 70% rule, every dollar of rehab cost reduces your MAO by the same amount. If you underestimate rehab by $15,000, you effectively overpaid for the property by $15,000. This is why experienced investors walk every property with a contractor (or have deep personal renovation knowledge) before making an offer.

How Vortonic Helps

Vortonic's platform includes rehab cost estimation tools that help investors build accurate renovation budgets based on property type, size, condition, and local labor markets. The deal analysis engine factors rehab costs into MAO calculations, profit projections, and holding cost models — so you can see exactly how changes in rehab scope affect the bottom line.