Guide
How to estimate rehab costs
Team RE Underwrite Lab
A rough stack, not a bid
A contractor's bid names the work. A rate per square foot does not. This page shows how to stack a rate, a few line items you already know, and a contingency so the lump sum you type on the flip calculator is at least an explicit guess.
RE Underwrite Lab does not bid houses, and it does not ship a cost book or an RSMeans feed. You bring every dollar.
Formula
Base = square feet × your cost per square foot. Subtotal = base + line items that are not already inside the rate. Contingency = subtotal × the percent you choose. Rough total = subtotal + contingency.
The rehab cost estimator on this site stops at the base multiplication. The extra lines below are paper you do before you type one lump sum into the fix and flip calculator.
Example
Illustrative example. A house of 1,240 square feet at $47 a square foot is a base of $58,280. A roof allowance of $8,400 and a panel allowance of $3,150 bring the subtotal to $69,830. A 10% contingency is $6,983. The rough total is $76,813. These allowances are made up. They are not a bid and not a price for any address.
If the roof is already inside the $47 rate, adding $8,400 again double-counts it. The page cannot tell which choice you made.
Common pitfalls
A pretty rate per square foot that came from a different city's cosmetic remodel will miss a foundation, a sewer line, or a permit office. The multiplication does not visit the house.
Skipping contingency because the first walkthrough looked clean leaves no room for what is behind the drywall. Ten percent in the sample is not a rule. It is a number you can replace.
Steps
Multiply size by a rate you choose
Square feet times dollars per square foot is a rough base. It is not a scope of work.
Add line items the rate does not cover
A roof, a panel, or another system you already priced gets added on top if it was not inside the rate.
Add a contingency percent
A percent of that subtotal is the pad for work you have not seen. The pad is still a guess.
Questions
Is the rough total a number I can hand a contractor?
No. A contractor prices a scope. This total is a guess you can replace when a bid arrives.
Why not use the estimator's default size?
The public estimator has its own sample size and rate so the widget is visible. This article uses a different size and rate so the two pages are not the same example.
Where does the lump sum go?
Into the rehab budget on the fix and flip calculator, once you are willing to use one number. That calculator does not split the number into trades.
Does 10% contingency cover a bad inspection?
Only if the surprise is inside that pad. A failed sewer or a new roof you did not list can be larger than 10% of the subtotal.
Will the site price labor for my zip code?
No. There is no labor table behind the page.
Example only. Not financial, investment, legal, tax, lending, or appraisal advice.
Estimates only. Not financial, legal, tax, or investment advice. RE Underwrite Lab calculators and PDF reports provide educational estimates based on the numbers you enter. Actual purchase costs, rents, expenses, financing terms, taxes, insurance, vacancy, rehab costs, refinance eligibility, and returns vary by property, market, lender, and local law (including short-term rental rules). We do not guarantee any outcome, profit, cash flow, or appraisal. Some content and tools may be generated or assisted by artificial intelligence and can contain errors. Always verify assumptions with licensed professionals and your own due diligence before making decisions.