Every successful rehabber will have his or her own framework for evaluating the scope of potential deal and estimating renovation costs. In this article, the framework we use to evaluate the scope and estimate the rehab costs for your potential deals.

• The 25 Renovation Components
• Scope of Work (SOW) Tasks
• Cost Guidelines
• Determining Your Local Price
• How to Pay for the Job

Our frame work involves breaking up the property into each of its primary functional components and then evaluating each of these component individually and in detail. The framework breaks up the exterior of the property into ten (10) major components, breaks up interior of the property into eleven (11) major components, and then four (4) other general components, that are combination of interior and exterior components.

The 25 Renovation Components

Every successful renovator will have his or her own framework for evaluating the scope of a potential deal and estimating renovation costs.

Exterior Components	Interior Components	General Components
1. Roof	11. Demolition	22. Permits
2. Gutters/Soffit/Fascia	12. Plumbing	23. Mold
3. Siding	13. Electrical	24. Termites
4. Exterior Painting	14. HVAC	25. Miscellaneous
5. Decks/Porches	15. Framing
6. Concrete	16. Insulation
7. Garage	17. Plasterboard
8. Landscaping	18. Carpentry
9. Septic System	19. Interior Painting
10. Foundation	20. Cabinets/Countertops
	21. Flooring

Scope of Work (SOW) Tasks

In this section, I’ll detail the potential SOW tasks you should consider for the particular component being discussed.

Example: Roofing Systems

While roofing systems can be pretty complicated, from renovator’s point of view they are pretty simple. For 95 percent of the roofs you encounter, your renovation tasks will include one of the following;

Roof Maintenance	For roofs that have not reached end of life, a qualified roofer will walk the entire span of the roof, fixing minor items as he goes. This includes fixing flashing issues, repairing nail pops (nails that are protruding from the shingle that may allow water to penetrate), and nailing down loose shingles. Even a few missing or damaged shingles shouldn’t be too much of an issue, assuming the roof isn’t overly discolored and matching shingles can be found to replace the missing or damaged ones.
Replace Sheathing/Roof Deck	Generally, between the roof framing/structure and the roof covering there’s a layer of wood sheathing-OSB or plywood. If water permeates the roof covering, it can damage the wood sheathing and the sheathing will need to be replaced when roof is replaced. You can generally get a goof idea of the condition of the sheathing and how much might need to be replaced by looking up underside of the roof from inside the attic (space between ceiling and roof).
Roof Replacement	For roof that are end of life or damaged beyond few shingles, replacement probably is necessary. A qualified roofer will remove the existing roof, replace the various layers (sheathing, underlayment, shingle), replace the pipe boots (the vent pripes that extrude from the roof), and reflash all openings. A typical roof replacement shouldn’t take more than two days for a qualified crew.

Cost Guidelines

Example: Roofing System

The size of a roof is generally measured in unit called a “square.” A square is approximately 9.30 square meter. For example, a flat roof that is 10 meter long and 8 meter wide would be 80 square meter in area, which roofers call 8.62 squares.

Unfortunately, it’s often difficult to determine an exact amount of area that a roof encompasses because there are multiple different surfaces and most roof surfaces are pitched to some degree (e.g. Hip, Hip and Valley, Gambrel, Gable etc). That said, it recommended to multiply the length of the house by the width of the house and then multiply result by two to get approximation of square meter of a typical roof. Mathematically, this number should be a little bit higher than the actual roof size but being conservative is always a good thing.

As an investor, it can sometimes be cheaper to purchase roofing material yourself and the pay for labor, only quote from local roofers-most will be happy to provide this. Keep in mind that if you decide to get a labour only quote, you should determine if the quote includes a dumpster for haul-away of debris or whatever that is an additional cost you will incur.

Roof Maintenance	This will vary based not only on location but also on size of roof, roof material, and complexity of the roof.
Roof Sheathing	Roofer will replace entire sheets of sheathing, even if only a fraction of a piece is damaged. So, expect to pay for sheathing repairs based on the number of sheets of wood that are needed.
Roof Replacement	Roof replacement is one of area in the construction where there is tremendous variation in terms of material and labor costs. For material, the cost variation is largely due to climate variation. In cold climates, roofing requirements need to handle with extreme temperatures and snow accumulation. In terms of labor, roofing has one of the highest insurance costs. While we recommend using insured contractors for rehab work, roofing is one area where the cost between insured and uninsured contractors will be substantial. Other things that drive these large price ranges and will affect the cost of replacement include the complexity of the roof, the height of the property, and the time of year, which can affect weather conditions and temperature.

Determining Your Local Prices

Determining the cost of roofing work in your area shouldn’t be very difficult. Most roofing contractors are willing to provide price guidelines without coming out to see the property, assuming you can adequately describe the job.

My recommendation is to call several roofing companies and ask them, “As a ballpark estimate, how much do you charge per square to remove hall away, and replace a typical, non-complex, 20-sqaure roof of a two-story property?” Make sure you verify that the price they give you includes labor, material and dumpster. Alternatively you can call us, we will endeavour to assist you with any renovation project.

How to Pay for the job

Roofing is one of the few renovation areas where the material required at the beginning of the job can comprise a significant portion of the total cost of work. While I very much prefer working with roofers who can front the cost of the material and don’t charge until the job is completed, I will occasionally work with roofers who insist on material payment upfront.

I will never pay more than 50 percent of the total cost of the job upfront (after th materials are delivered) and I will not pay remaining amount until the satisfactory completion of work.

Typically, tearing off and replacing a standard roof can be completed in one or two days, so there is little reason for intermediate payment between the time the materials are purchased and the job is completed.

Concluding words

When evaluating scope and estimating costs, I suggest that you consider each of these components one by one, once you have completed the evaluation for each of the 25 components, you should find yourself with a detailed SOW for the project, which can be used to generate your renovation budget estimate.

Disclaimer:

Email: yasir@geelongpropertyconsulting.com