Rehab budgets that survive contact with the house

Budget the scope, not the square footage

Per-square-foot rules of thumb are how people lose money politely. They are fine for a first pass over a listing photo and useless the moment you are deciding whether to sign. A budget is a list of things that must be done, each with a price. If you cannot write the list, you cannot price the job.

Price the big five before you commit

Roof, mechanical, electrical, plumbing and foundation. Those five are where the numbers that kill a deal live, and four of them are invisible in photographs. Everything else - kitchens, baths, flooring, paint - is predictable enough to estimate within a few thousand once you have done a handful.

Get the sewer scoped

On anything pre-1980, a sewer lateral scope costs a couple of hundred dollars and regularly finds five figures of work. It is the single highest-return inspection on an older house and the one people skip most often because the house looks fine.

Contingency is part of the budget

Ten per cent on a cosmetic job, twenty on a full gut, and it is not a rainy-day fund - it is the line that covers the thing you could not see until a wall came down. A budget without contingency is not a budget, it is a hope with decimal places.

Hold the scope still

The most common way a rehab runs over is not a surprise, it is a decision: the tile you liked better, the wall that would be nicer open. Every change after work starts costs more than it would have at the planning stage and moves your finish date. Decide everything you can before the first crew arrives, then hold the line.

Get numbers from the people doing the work

A budget built from a spreadsheet you found online is a budget built on somebody else's subs, somebody else's city and last year's material prices. Walk the property with the contractor who will actually do the job and get the number in writing before you commit. If the timeline will not allow that, get them on a video call while you walk it. That is worth more than any cost-per-foot table you will ever download.

Permits cost time before they cost money

Structural work, an electrical service change, a new plumbing stack, anything that moves a wall: all of it usually needs a permit, and the permit takes longer than the work does. In some of these cities that is two weeks and in others it is two months. The fee is rarely the problem. The calendar is, because your holding costs run the entire time you are waiting.

Holding costs belong in the budget

Taxes, insurance, utilities and the cost of money do not pause while the work happens. On a four-month rehab they routinely add several thousand dollars, and they are the line people leave out because they are not something you buy from a supplier. Put them in at the start and the project stays honest with you the whole way through.