The answer is not pretty and you may not like it, but honesty and integrity is something I value as an educator on this topic. That answer is “IT DEPENDS”. If someone says they know exactly what your house will cost to fix they are probably not being completely honest with you. They can get close to the actual number, but they will usually not be exact. Even if a contractor or construction professional were to come to your house or project and evaluate it thoroughly by doing measurements and really assessing what the scope of work is, there are always unforeseen variables involved. The number they give you and the number you pay at the end of the project is often times different. In this article we will discuss different variables that will affect what your house will cost to fix up, but if you want some more specific numbers, we are currently putting an article together that has exact prices for different jobs and scenarios that have happened to us. Stay tuned. Moving forward with the variables that determine what type of job you have ahead of you.
Variable 1: Who are you?
Are you a fix and flipper? A landlord fixing a rental property? Or just a homeowner? The answer to these questions will typically uncover the answer to variable 2, your desired scope of work. Fix and flippers purchase distressed properties with the intention of doing full home renovations for a profit based on sales comparables in a given market. A landlords primary intentions are to make their rental home into a habitable (rent ready) condition based on the price point of comparable rentals in the immediate area. We will go over how to come up with comparables in a later blog. Homeowners however are usually doing only certain improvements they see necessary based on their personal desires or perhaps don’t mind spending more money than an investor to get their house exactly how they personally want it.
Variable 2: Scope of work?
The scope of a construction project can be very minimal in scale or a major complete overhaul of a home. Are you doing just a kitchen, or are you taking the house down to the studs to completely renovate it? If you are just doing a kitchen or bath there can be obvious yet easily forgotten aspects that come along with it. Does it require moving any plumbing or electrical? Are you refinishing or replacing cabinets? Were the original cabinets build on top the original flooring or around it? The list goes on and on. If you look at our kitchen remodel blog coming soon, we detail as many of these unforeseen variables as possible. Ultimately the underlining point of this blog is that there are numerous variables and unforeseen aspects that can affect your bottom line.
Variable 3: Unforeseen issues
Ever hear the term, “opening up a can of worms”? This is about as analogous to construction as it comes. From opening a wall to fixing a foundation or even replacing a roof; there can be and will worms in every can. Worms = $$$!
The most common unforeseen variables in regards to typically older homes are the plumbing, electrical, and structural issues (roof, foundation, original framing) that usually arise from doing any minor or major improvements to a property. What lies behind each wall when you begin a construction project is usually a mystery. Unfortunately, the easiest yet most expensive option of seeing what is inside a given wall is by removing the drywall. Another option that is not always as reliable is tracing every electrical or plumbing line hidden by insulation in the attic to each wall.
When it comes to bigger worms you might find, take a hard look at any foundation issues you may have. You don’t always know that when you repair your sinking foundation that cracking drywall will be the extent of your problems. Depending on the severity of your foundation issues, your underground plumbing could have been crushed in several spots. This will cause water to pool under and around your foundation causing it to sink even further. Not only does this affect the integrity of your property as a whole but the prices on repairing crushed plumbing tend to be quite high. You can try to look for signs of potential issues prior by having your electrical, plumbing systems, and foundation inspected prior to beginning the project, but you really will never know truly to what extent the damages are until you begin to dive into repairing them. Its a normal calculated risk you must take whenever you decide to go full force into the world of construction.
In conclusion, it is very hard to say what exactly your full remodel will cost. What we do when remodeling a home is try and be as conservative with the numbers as possible given the clues we see around the house that we talked about above, and once we have our base remodel number, we add 10-15% contingency on top of that number to handle the unforeseen issues that arise. If you hire a contractor and they tell you a particular job will cost $20,000. Perhaps set aside $22,000 for overruns and unforeseen. It definitely isn’t as glamorous as they make it look on tv, but if you are armed with the right information and you are precautious when putting pen to paper you can save yourself a big headache by having some funds set asides for these unexpected issues. Remember, “Fail to plan, plan to fail”.
If you have any questions about planning a particular project you have in mind or would like more detail on any of the aspects discussed above please feel free to reach out to us and we will do our best to get those questions answered.