Rehabbing a property (also known as remodeling) takes a lot of work. Your job gets even more challenging if you’re on a tight budget. But rehabbing a home on a tight budget is completely possible. You need to have a solid plan in place before you get started.
Check out this guide to discover how to rehab a house on a budget.
What is a Home Rehab?
First things first, what does it mean to rehab a home? Rehabbing a home involves taking a run-down property and restoring it to a fresh state.
When you rehab a home, you typically don’t make any drastic changes to the floor plan. Instead, you find other ways to turn the space from drab to fab.
The main reason people rehab homes is so they can flip them for a profit. For example, let’s say someone buys a run-down house for $200,000. They then put $50,000 worth of renovations into the home.
Thanks to their renovations, they’re able to sell the home for $350,000 and therefore turn a profit of $100,000.
People also rehab homes simply because they want to make the space they’re living in look nicer. Whatever your reasoning is, rehabbing a home is a huge undertaking. But it can also be a lot of fun!
How to Rehab a House On a Budget
Now let’s take a look at what you need to do to rehab a house on a budget. Here are our top tips:
1. Evaluate the Property
While it can be tempting to dive right into the rehab process, you first need to do an evaluation of your property. Hire a professional inspector to walk through your home with you.
During the walkthrough, you should examine the home’s electrical system, plumbing system, heating and air conditioning, flooring, roof, walls, and ceilings. Make notes of any serious issues, and take pictures during the inspection.
Your inspector will then help you create a list of everything that needs to be repaired and fixed.
2. Create a Budget
Once you have a list of everything that needs to be fixed, it’s time for you to create a budget. Do some online research to figure out how much each renovation project is going to cost.
For each renovation project you have planned, research ways to save money. For example, let’s say redoing the floors is one thing on your to-do list. To help save some money, look into the most affordable flooring materials.
Also, don’t forget that when estimating your budget, you need to account for the cost of materials as well as the cost of labor. Don’t just write an overall estimate for how much your project will cost.
Instead, create an itemized list of how much you’re willing to spend on each project, material, and contractor. This way, you won’t be tempted to go over-budget, and there won’t be any surprises along the way.
That being said, it’s still important to prepare for the unexpected. This is why we suggest leaving a little extra room in your budget for mishaps, add-ons, and do-overs.
When figuring out your budget, you may also want to look into hard money rehab loans.
3. Figure Out What You Can DIY and Shop for Quotes
Even if you’re not a professional handyman, there are probably certain projects that you can handle yourself. Do some research into the steps it takes to complete each renovation project, and be honest about your skillset.
While it’s usually cheaper to go the DIY route, if you make a big mistake, you could end up spending thousands of more dollars than you intended. If there’s one DIY project you can do yourself, it’s your own demo. Turns out, it’s really hard to mess up knocking down a home. Doing the demo yourself can save you about $500.
Once you have a list of projects that you need to hire a contractor for, start shopping around for quotes. When asking for quotes, make sure you understand everything that’s included in the price.
Also, make sure you have a clear understanding of how each contractor charges. Some charge by the hour, while others charge a per-project rate. The right team can really make all the difference when it comes to the success of a rehab project, so take your time selecting your crew.
4. Start Small
If this is your first home rehab project, don’t bite off more than you can chew. While it may be tempting to go all-in, start small always you to learn as you go.
If you’re not sure where to start, begin with an inconsequential room that doesn’t get a lot of visitors. For example, maybe there’s a small office in the back of your home that no one really uses but is in desperate need of a makeover. Redo this room, and then if you feel confident about how it turned out, move onto a bigger room.
5. Pick Up Goods Yourself
One cost that can really creep on you when remodeling is the cost to have materials delivered to your home. To save some money, take care of this portion of the project yourself.
Even if you don’t own a truck, renting one and hauling your own materials will still be more affordable than hiring someone else to do it.
How to Rehab a House: Are You Ready to Rehab?
Now that you know how to rehab a house, it’s time to put these tips into action. Before you know it, your house will look brand new!
Be sure to check back in with our blog for some more home renovation tips.