How To Assess Renovation Expenses on a Fixer Upper

Purchasing a fixer-upper can be a great investment, but it’s important to accurately assess renovation expenses before committing to the property. Many homeowners underestimate the cost of renovations and go over budget, causing unnecessary stress and financial strain.

Let’s go through the steps you need to take to assess renovation expenses on a fixer-upper so you can stay on budget and ensure your project succeeds!

Create a Detailed Plan or Scope of Work

Before assessing renovation expenses, creating a detailed plan or scope of work is important. This plan should include all the renovations and repairs necessary for the property. Be sure to prioritize the most important repairs, such as those that affect safety and structural integrity. Once you have a list of necessary renovations, assessing the estimated cost is easier.

Get Multiple Quotes

Getting multiple quotes is important when assessing renovation expenses. This step will allow you to compare prices and find the most cost-effective option. Be sure to research and choose reputable contractors with experience in renovating fixer-uppers. Don’t be afraid to ask for references and to check their credentials before hiring them.

Consider the Cost of Materials

Before assessing renovation expenses, it’s important to consider the cost of materials. The cost of materials can vary greatly, depending on quality and quantity. Shop around and compare prices to ensure you’re getting the best deal. You may also want to consider using recycled or salvaged materials, which can save money and add character to your fixer-upper.

Factor in Hidden Costs

Factoring in hidden costs is crucial when assessing renovation expenses. Hidden costs can include permits, inspections, and unexpected repairs that may arise during the renovation process. Set aside a contingency fund of at least 10% of the total renovation cost to cover unexpected expenses.

Use a Spreadsheet

Use a spreadsheet to keep track of renovation expenses. This information will allow you to track all expenses and stay within your budget accurately. Be sure to update the spreadsheet regularly and to keep all receipts and invoices for future reference.

Assessing renovation expenses on a fixer-upper is an important step in the renovation process. Not only is it one of the most common mistakes when buying rental properties, but it can also be the difference between a successful project and an unplanned expense. Be sure to create a detailed plan or scope of work, get multiple quotes, consider the cost of materials, factor in hidden costs, and use a spreadsheet to help you stay on budget and make your fixer-upper renovation dreams come true.