How to Estimate Repairs Quickly and Accurately in Real Estate

How long does it take you to walk a property to estimate repairs as a real estate investor? 

This is a integral part of evaluating investments. 

If you can’t conduct this effectively, someone on your team should.

Join us today for a review of being efficient and effective in estimating repairs for home renovations.

Let’s get started.

Repair Estimate Efficiency

It is common that sellers expect you to be the expert. If you aren’t the expert, it could be detrimental to your creditability.

After-all, you’ll pay the cost if your assessments are inaccurate. 

Let’s try to not let that happen.

Some sellers expect you to walk the property quickly and give them an offer right away, while others allow you to take your time. 

Regardless if you are rushed or not, the time you take to review the property will be judged by the seller.

If the seller thinks you don’t know what you’re doing, and don’t have a valid reason, they’ll also judge your business acumen. This can directly affect your ability to close deals. 

Perhaps they will think you can’t close and this is just insight to other concerns that will arise later.

Perhaps they will choose the competition instead due to their concern.

Professionalism, is not only proficiency in engagement skills, but also proficiency in knowledge of your craft.

Be sure to prune your skills in both, so that you support creating a valuable experience for your client. Proficiency in either regard, will improve interactions. Granting you more dialog with the customer. 

Today, we will focus on the assessment of the property. 

For further detail in estimating repair costs, see our article on How to Calculate the ARV & Repairs. We will not get into assessing costs in this article.

So what are the key aspects of the property to pay close attention to?

Let’s start with the most cost-intensive portions and then proceed to lower cost items…

The Vital Essentials

Roof –

The roof is a high cost item that has a “wear rating.”

The life expectancy of a shingle roof is 25-30 years.

This is not applicable to slate or metal roofs.

Using the square footage of the home, reference to how many approximate squares it will take to replace the roof. 

Windows –

Windows can be an expensive replacement item.

Know your costs per window and assess the quantity of windows needing replacement.

Windows on average are about $400 – $600 per window, purchased and installed.

Electrical –

Electricity is a major component of a home.

If replacement is necessary, this is a large cost item.

Proportional repairs should be assessed quickly.

Be sure to check for knob and tube and breakers in the electrical panel. It is important to know if a property should receive an upgrade.

Plumbing –

Plumbing is a large and expensive component if replacement is required.

Check for water damage when you are walking the property and ask about any water main issues.

Proportional repairs should be assessed quickly.

HVAC –

Furnace, boilers, water heaters and the applicable components that support the HVAC system are expensive replacement items.

Inquire on the age of each from the owner to assess possible replacement.

The life expectancy on a furnace or boiler is 20 – 30 years and approximately 10 years for a water heater.

Proportional repairs should be assessed quickly.

Foundation –

Although a wide variance in cost, foundation repairs can either be a relatively low cost item or it could be a very high cost item.

Ranges could be from $3,000 to $60,000.

This could be your highest cost item by far.

Be able to assess settling cracks versus foundational related cracks and/or separation of base-level points on the slab floor.

A keen eye is needed for this and issues could be visible from the exterior or interior of the property.

Foundational issues affect many components – floor joists, framing and basements.

Next, let’s get into any prep work prior to cosmetics.

Level of Demolition Needed

Note: The degree of landscaping and grading should also be considered within this category. However, most homes have smaller lots and regrading an entire lot is not common unless you are renovating luxury homes. If this is the case, the cost of renting construction equipment should be considered here, as this is a high cost item.

Demolition –

If an entire home, needs to be demo’d you must know.

This is huge difference with just demo’ing a few rooms and replacing drywall.

Be mindful of how many dumpsters you’ll need and the increased costs related to permits.

Permits are usually required for electrical work, framing work, plumbing and drywall.

The scale of the scope of work, can be minimal or extensive.

Proportional repairs should be assessed quickly.

Framing –

Assess if any new framing needs to be completed or if the home’s layout is fine as is. If you are planning to change the floor layout, just express that to the client.

This cannot be assessed quickly, but make sure you know your ballpark of this potential scope of work if needed.

Be mindful that framing can also be need on exterior porches.

Proportional repairs should be assessed quickly.

Drywall –

Assess if any drywall needs to be replaced or repaired. Proportional repairs should be assessed quickly. Know your cost to install a finish drywall per sheet.

Now we get to cosmetics. Although many of the cosmetic related repairs can be expensive, we do have several that are not. 

Let’s review…

Cosmetics

Kitchen –

Assess if cabinets, countertops, sinks, facets and appliances all require replacement.

Know your numbers for each. Besides sinks, facets and appliances, cabinets and countertops and are assessed by linear feet. Know your cost per linear foot.

Bathrooms –

Assess if vanity mirror, sink and lighting need replacement.

Next assess if tub, shower or drywall needs replacement.

Next apply if you will install shower tile or not. Know your costs per replacement item and assess quickly.

Flooring –

Flooring should be gauged by the entire square footage of the house that will receive replacement flooring.

Know your cost per square foot and assess quickly

Siding/Gutters –

Determine if siding and gutters need replacement.

You will need to assess the length by width of the property quickly. Get familiar with common home dimensions in your area.

Proportional repairs should be assessed quickly.

Paint –

Paint should be determined by what you are paying on average per square foot.

If you need to paint the interior and exterior you need the approximate cost per square foot of each.

This should be assessed quickly.

Lighting –

Count the amount of fixed lighting fixtures the property has and know your approximate cost per lighting fixture.

This should be assessed quickly.

Outlets/Switches –

If required, know what your costs are to replace outlets and switches so the property is uniform and receives the updates it needs.

This should be assessed quickly.

Knobs/Pulls/Hinges –

Know where you will replace door knobs, hinges and pulls in the property in addition to the cost for each.

This should be assessed quickly.

Doors/Trim –

Assess if any doors need replaced including the framing.

Also assess if any trim in the property for windows, doors and floor will require replacement.

This should be assessed quickly.

Contingency –

Plan for approximately 5% of your total assessed repair costs to be inaccurate. Add 5% contingency to your total for any unknown surprises.

Conclusion

These include all of the items to assess.

It is obvious that you will need a keen eye for detail in addition to a reference to material & labor costs as applicable. These cost vary depending on your plan and your contractor.

Therefore, some homework on your behalf is required.

• Check out our Construction Calculator, an investment calculator designed to help you get associated with line-item costs as well as overall budgeting for your projects.
• Our House Flipping Calculator, BRRRR Calculator, and ARV Calculator are other options that could be helpful.

Assessing the costs according to the scope of work and finish-level, is up to you as well.

Ultimately, you should grow your ability to assess repairs well enough that you can walk the property quickly, and assess what the cost will be.

Ideal assessments are within 5% margin of error.

Anything missed, should be picked up in your contingency costs. In the beginning perhaps you’ll want to start with a higher contingency until you are proficient.

Ideal walk time, should be 10-15 minutes for a single family home under 2,000 square feet.

If, or when it takes longer than 10-15 minutes, there should be higher-level concerns that require deeper assessment. Therefore, the extra time is okay.

If you have a component of your acquisition plan, where another party comes to confirm the repair estimate, your walk should be slightly faster.

However, if this is your plan and you are providing an offer, your assessment must be really accurate. Significant changes in the offer price, will not resonate well with sellers. 

Practice your craft so that your proficiency level grows over time. Work at your craft and aim for high-level performances.

Thank you for joining us today faithful readers-future leaders.

We hope this article has been helpful for you today. 

Love ya and continue to strive for growth.

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Leave a comment if this was helpful for you or mention helpful details you’d add.