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Step-by-Step Guide to Rehabbing a House on a Budget

If you’re an investor looking to take on a large real estate project, you may consider rehabbing a house. It’s no doubt that the process can be costly, challenging, and time-consuming. However, rehabbing a home is a more rewarding and profitable investment strategy, especially if you stick to your budget. So, if you want to learn how to rehab a home while staying on budget, just keep reading. 

Contents of This Article:

What Is a House Rehab?

A house rehab is when an investor buys a property in its current condition and renovates or improves it. The goal of rehabbing a house is to sell it for profit or rent it out to tenants as a long-term investment strategy. 


It’s important to note that rehabbing a house differs from buying a fixer-upper. Usually, a complete home rehab is more extensive than a fix-and-flip project. This is because rehabbing a house involves renovations and more significant projects, while fixing and flipping generally focuses on more minor or cosmetic changes. 

Another difference between rehabbing a house and flipping a home is the cost. Since fix-and-flip properties require smaller repairs, completing them doesn’t cost as much. Next, we’ll review how much rehab a house costs. 

How Much Does It Cost to Rehab a House?

The average home rehab costs around $20,000 to $75,000 or more, depending on your size and type of property. To estimate the costs of rehabbing a house, you must factor in several things. For instance, you must first consider the property’s purchase price, as it’s the first significant cost.

Some other costs to think about include the following: 

  • Supply and Material Costs
  • Contractors and Labor Costs
  • Lender Fees
  • Permits Associated with Rehabbing
  • Ownership Costs

Thinking about all of the costs and steps it takes to rehab a house can become overwhelming. If you don’t know where to start, read along as we go over a step-by-step guide to help you. 

Step-by-Step Guide to Rehabbing a House

The first step to rehabbing a house is purchasing a property that needs renovations or repairs. Before making an offer, you’ll want to estimate the After Repair Value (ARV) to determine how profitable it will be once repairs are made. Then, you can better determine an exit strategy and which financing options will work best for your investment. 


If you’re not sure how to start once you’ve purchased your property, here are the steps to consider. 

  1. Evaluate Your Property
  2. Come Up With a Budget
  3. Find Qualified Contractors
  4. Get the Right Permits
  5. Demo and Clean the Property
  6. Start on the Exterior
  7. Finish With the Interior
  8. Complete Your Exit Strategy

Evaluate the Property

One of the most crucial steps in a home rehab is the initial property evaluation, especially if you’re on a budget. After all, overlooking potential major issues can hurt your budget, timeline, and profits. Therefore, inspecting the property with a professional inspector should be first on your to-do list. 

A professional inspection can help reveal any major interior or exterior issues. For instance, an inspector usually examines the electrical system, plumbing, foundation, roof, flooring, heating and cooling, and more. Taking photos and making notes of major issues is important during this time.

Come Up With a Budget

Once you know which repairs are needed, you can start estimating costs and creating a budget. Make sure to include at least the cost of materials, permits, and labor within your estimate. Additional costs may include cosmetic updates or final improvements. 

Once you have a rough idea of how much it’ll cost, come up with a predetermined dollar amount that you’re willing to spend on the entire project. This can help you prioritize repairs or make changes to your rehab process. 

Find Qualified Contractors


Finding qualified contractors is one of the most crucial steps in rehabbing a house. After all, they’re responsible for turning your property into a profitable investment. So, you’ll want to spend enough time searching for qualified and reputable contractors. 

When looking for a contractor, ensure they’re qualified and certified to perform the work you need. Additionally, you’ll want to get references from previous clients to see if they’re a good match for your project. 

Get the Right Permits

Before starting rehabbing the property, you must ensure you have the proper permits. It’s best to check with your local building department to determine what types of permits you need for the type of work being performed. 

Demo and Clean the Property

Once you have the correct permits and you’re ready to begin rehabbing, the first step is cleaning out the property. Depending on the condition and property type, this will include removing all trash and damaged items from the interior and exterior of the property. 

Although it doesn’t necessarily add value to the property, this step will give you a good starting point to help prepare for any major renovations. Additionally, since you can do this step yourself, it costs nearly nothing except some time and effort. 

Start on the Exteriorfixing-homes-roof

A good starting point for major fixes is the exterior of the property. Usually, exterior improvements are more affordable and fairly manageable without a contractor’s help. Some basic repairs may include replacing railings, mailboxes, and windows. However, you may need help with specific projects like painting, roofing, and landscaping. 

To give you a good idea of what people are looking for in a home, assess the curb appeal throughout the surrounding neighborhood. It also gives you a good idea of small details that can make a difference while selling the home. 

Finish With the Interior

Most of the costs and work come from the interior repairs and renovations. Most rehab projects’ most expensive interior repairs include plumbing, electrical, and HVAC work. Then, you have to consider flooring, appliances, cabinetry, and other minor renovations. However, there are several ways to save throughout this process. 

The easiest way to save on costs is by finding interior projects that you could do yourself without hiring a contractor. For instance, you may want to repair existing parts of the home instead of replacing them. Or, you could tackle smaller projects on your own, like bathroom upgrades, new appliances, or minor repairs. 

Complete Your Exit Strategy

The last step is completing any final improvements and executing your exit strategy. Before putting the house on the market, examine all of the work done and schedule a final inspection. Once you feel confident about the work you’ve put in, you can sell or rent the property. 

After you find a buyer or renter, your rehabbing project is complete! If you’re renting the property, reach out to your local rental property management team in Baltimore for help finding tenants and maintaining properties. 

How Long Does It Take To Rehab a House?

Rehabbing a house can take anywhere from a few weeks to six months. Since each rehab is different from one another, the project timeline depends on several factors. For instance, you have to factor in the size of the property, specific renovations, and your team of contractors. 


That said, evaluating and estimating these costs is crucial before purchasing a property. After all, they directly impact your overall budget and timeline. 

If you’re looking at simple cosmetic fixes for a home, it can take anywhere from a few days to a few months. Some small renovations include painting the interior, installing new flooring and cabinetry, or purchasing new appliances. 

On the other hand, looking at more extensive renovations like a complete kitchen or bathroom remodel could take a few weeks to six or more months. That said, most renovations fall into this category, so it’s important to factor in the complexities of your rehab project. 

Care For Your Rentals With Property Management

If you’re rehabbing a house to start or add to your rental business, you’ll want to think about how you will manage it. After all, managing rental properties takes a lot of time and effort. Marketing properties, finding tenants, preparing contracts, and maintaining rentals add up to a lot of work. That’s why many landlords hire property management services.

Bay Property Management Group offers comprehensive rental management for landlords who don’t have time to manage each property. If you want to learn more about how we can help your rental business, contact BMG today. We manage properties in Baltimore, Philadelphia, Northern Virginia, and Washington, DC.