Generic cost-per-square-foot tables age quickly and can hide major differences in location, access, labor, materials, code requirements, property condition, and scope. Use them only as explicitly dated screening context when the source and method are known. A reviewed budget should be built from the actual property and local written bids.
1. Create a room-by-room scope
Record quantities, condition, finish level, demolition, disposal, protection, and sequencing. Separate cosmetic work from kitchens and baths, mechanical systems, roof and envelope, electrical, plumbing, structure, site work, and accessibility or code items.
2. Verify hidden-condition risk
A walkthrough cannot establish the condition of concealed wiring, plumbing, structure, moisture, environmental materials, sewer, or every mechanical component. Use appropriate inspections and qualified local professionals. Keep unresolved conditions visible instead of converting them to zero.
3. Obtain comparable written bids
Give bidders the same written scope and ask them to separate labor, materials, allowances, exclusions, permits, schedule, payment terms, warranty, and change-order rules. Confirm license and insurance where applicable. A low headline bid is not comparable when it excludes work another bid includes.
4. Add project costs beyond construction
- Design, engineering, surveys, testing, and permit fees
- Temporary utilities, security, storage, and site protection
- Financing, insurance, tax, and other carrying costs
- Lost rent or lease-up assumptions during work
- Cleaning, punch-list, inspections, and closeout
5. Choose and disclose an uncertainty reserve
There is no universal contingency percentage. Set the reserve based on design completeness, building age and condition, access, price volatility, bid coverage, and unresolved risks. Show the base scope and uncertainty reserve separately so reviewers can see what is known and what remains provisional.
6. Reconcile the budget before relying on an acquisition model
Update the scope after inspections and bid leveling, then model schedule and cash timing as well as total cost. TrueCap's released core analyzer does not replace contractor bids, engineering, permits, or a specialist construction model. Use it only for the released preliminary rental metrics under the assumptions actually shown.
Frequently asked questions
What should a property-specific rehab budget include?
Document the scope and quantities, compare local written bids, include design, permits, testing, carrying costs, and closeout, and show any uncertainty reserve separately.
Can a generic cost-per-square-foot table replace local bids?
No. Generic tables may provide dated screening context, but they do not establish the condition, scope, labor, materials, code requirements, or access costs for a specific property.