All The Costs That Go Into Home Rehab

by Erin Fernschild 05/23/2022

If you’re buying a fixer-upper, whether you plan to live on the property or flip it, there are plenty of things that you’ll need to consider. So you can budget appropriately, below, many of the costs and fees are laid so that you can see what you’ll need to budget for when rehabilitating a home.

 

 

The Overall Costs

 

The costs that you’ll incur in buying and finishing a home that needs to be rehabilitated are as follows:

 

  • The team needed for rehabilitation
  • The purchase price of the property
  • The cost of owning the property
  • The cost of selling the property (if you plan on flipping the home)

 

The Team

 

The people you put together to rehab your home will be critical to the entire rehabilitation process. You should take the time to research each person that you’re hiring to be sure that they are a good fit for the job.

 

Professionals who will be involved in the process include:

 

  • Lender
  • Attorney
  • Realtor
  • Contractor 
  • Insurance agent
  • Home inspector

 

You can ask your realtor or other trusted contacts for recommendations. Putting a team in place helps to make the entire, sometimes cumbersome process of house rehabilitation a bit smoother. 

 

Buying The Property

 

These costs are pretty standard as if you were buying any other home. You’ll need to pay closing costs, attorneys fees, realtor fees, and more. Costs typically included in a home purchase are:

 

  • Inspection
  • Purchase price
  • Closing costs
  • Appraisal

 

You should budget for all of these typical home buying costs when buying a rehab home. 

 

The Costs Of Home Rehabilitation

 

This is where things get expensive. You’ll need first to pay a contractor just to consult with them to see how they will create your vision for the property. You could also take another route and consult with a home inspector who has experience in construction. They can give you an idea of what the construction expense will be and what needs to be addressed. 

 

When you do get to meet with contractors, you’ll want to understand their construction experience and feel comfortable that they can produce the work that you need at a high level of quality.  

 

Owning A Home

 

Once you have the home in need of rehabilitation in your possession, you’ll need to pay the typical costs of any homeowner. These include:

 

  • Mortgage payments
  • Taxes
  • Insurance
  • Utilities
  • Maintenance

 

Even if you’re not currently occupying the home, once the property is purchased, all of these costs will need to be covered and considered. 

 

If you decide to flip the property and sell it, you’ll need to consider additional costs including realtor’s fees and other closing costs.  

About the Author
Author

Erin Fernschild

With an undergraduate degree in International Marketing from William Paterson University and a wealth of business experience, Erin brings a unique set of knowledge and skills to both buyers and sellers. From helping buyers purchase their perfect home to maximizing a seller’s return, Erin combines drive, creativity, and attention to detail to ensure that each transaction is a success.

In 2016, Erin obtained her real estate license and joined the RealtyQuest team at Kinard Realty Group which then merged into Better Homes and Gardens Real Estate Shore & Country Properties. Prior to joining Better Homes and Gardens Real Estate Shore & Country Properties, Erin enjoyed a successful career in finance at powerhouse companies including Deutsche Bank, Bear Stearns, and Credit Suisse. In a variety of sales and marketing roles at those companies, she handled a broad range of responsibilities, including business development, new product development, product implementation, and product marketing.

She is a great listener and communicator and knows how to tailor each transaction with the least amount of difficulty to fully meet her clients’ needs. She is a natural people person who will work tirelessly on your behalf.

A New York City transplant, Erin loves everything about Fairfield and New Haven County. She is warm and energetic, and her enthusiasm for these areas is contagious. Erin is also very active in the Stratford Community, serving as a volunteer for St. James School Stratford-CT, a member of the Lordship Improvement Association, and a parishioner at Our Lady of Peace, Lordship-CT.

When not working on real estate, Erin loves spending time with her husband and two young children and enjoys skiing, running, boating, Barre classes, restaurants, and friends.

Her friendly style, tenacity, and technological abilities provide her clients with a competitive edge in challenging markets.