Average percentage of the ARV for renovation costs

[Horacio Gutierrez]

Hello, I know each house would vary on how much to spend on its renovation costs, however, is there like a rule of thumb of a certain perecentage of the ARV price that someone should spend on renovations cost so it wont be to expensive which could lead to having less equity in the home?

[Charlie MacPherson]

@Horacio Gutierrez There is no rule of thumb because rehab costs vary widely.

For example I previewed a rehab property a couple of days ago that was a gut, right down to the studs.  Horse hair plaster pulling away from walls and ceilings, knob & tube, tons of trim needing repair, kitchen and bath from the 1930s, plus it needed a new septic.  That’s probably $125K in rehab.

Right now, I’m in another rehab (I’m doing an open house).  It needs a new (small) kitchen, new bath, paint, refinished hardwood floor a little light carpentry).  The rehab budget here is about $50K.

I’ve seen others that need paint and very light refreshing.  Those budgets can be under $10K.

So in the end, it depends entirely on the scope of work.