The Real Cost of Renovation Costs
Have you ever thought about how much it would truly cost to renovate a project like, let's say, a two bedroom, two bath condo? I'm going to divulge all the numbers, dissect them and hopefully shed some light on those exact questions.
I am in Las Vegas, Nevada, where I just locked up this condo. It's a two bedroom, two bath, a little over 1000 square feet and it needed a complete gut job. So what does something like that look like?
Step one. Demo. It's Demo Day, baby. You see it all the time on HGTV, but it's the truth.
How much is it going to cost to get a crew in here and take everything out to include on this specific project popcorn ceiling? So, not only ripping out the cabinets, but also stripping the popcorn ceilings, re texturing, all that good stuff. One of the things that people don't really think about is trash removal. So always, always, always, budget in a large dumpster that needs to be deposited outside for that demo day.
So for demo and trash on this specific condo it cost me $3000. Oh, that is terrible to say, but it's $3,000. $3,000 to rip out everything, take off the popcorn ceilings and dispose of it. Now, you're going to want to be super timely in this because you're only going to have that trash bin for like four days before having to extend it. Also, you're going to have to coordinate with HOAs or you'll get written up and you don't want that, so coordinate in advance.
After that, I always call the electrical portion, the Swiss cheese portion. So before I do anything else, I want my electrician to come in, cut holes everywhere that I want to add anything electrical. Electrical lighting is actually huge, especially in this project. This may be something that you can sidestep. There was no way that we could sidestep that in this particular condo. It was so, so dark. So we added a bunch of LED lights. I've also added pendant lights and some seating areas. I'm going to make it super nice. Remember, I'm trying to command a very high end rent here, so you’ve got to think about who you're trying to target. Your target audience.
I want this to showcase beautifully and photograph beautifully, which means good lighting, updated electrical USB outlets by the bed. Things that people are going to expect these days. So electrical can get kind of costly. This is my guy that I've used forever and I bet you're not even going to guess this cost me $4000. $4,000 worth of electrical. I would say that this one here is one that you could get away with, potentially, not doing depending on the age of your project, but it's one that I would definitely consider because when everything is out and gutted, that's when you want to be cutting holes in your property. Not down the road once everything's painted and furniture is in place, etc. So take some time to really discuss the electrical.
Next, I had my labor and cabinet estimates come in and there were multiple. I've got a couple of different guys that do this for me, but labor for cabinets, baseboards, and countertops that was another thing that I wanted to put in here. What is all of the accumulative stuff going to cost me to place it in my property? This one's going to be a big one!
So how much did it cost to install my floors, the cabinets, the countertops, and the baseboards? It cost me $16,000 and it took 2 to 3 weeks. You always have to factor in the material. Now, this is where people get sloppy because you start to renovate a project thinking about your own needs and your own wants and your own style and your own taste, which may be more extravagant than what the project is commanding now. Yes, I am trying to get that high-end rent, but there's always going to be a budget in mind. So we actually researched floors in Las Vegas and this was no joke, Lowe's had a great deal on them. They're luxury vinyl plank. They're going to last me forever. And that's kind of the concept. When I renovate this project, I want it to be done for years. I don't want to touch it. I want it to be done.
So luxury vinyl plank threw out nice cabinets for my kitchen, quartz countertop, and a pretty much indestructible backsplash and stone on my fireplace. This place is going to look amazing. So my materials all in all are going to cost me about $4,000.
What is the very last thing that we do? And I say last because you are going to have a lot of people in and out of your project banging up walls, making holes, things like that. So typically you want to have your painters come in last. Paint the walls, paint the ceilings, paint and trim out the doors and the baseboards. Then it's done. It's a finished project that's only going to cost me about a thousand bucks.
Now I did have to texture and primer on this project. That was actually up here among the 3 K. I used the same guy to demo the trash and he textured and taped for me. So some of that's up here just painting it. The actual color is going to cost me $1,000. So these are my exact numbers. If you're good with math, which I am not, I pre-calculated this out, just for you. It is going to cost me $28,000 to renovate this two bedroom two bath, long term hold. I’m trying to command $1900 dollars a month which will make me $850 a month.
I want this property long-term, for me and for my family, which means, do it right the first time. I don't want to be coming back in here, and having to constantly work on the condo. So this budget may be a little bit more than most people want to spend. For me, it was signed, sealed, delivered and closed the door.
I'm done with that project. Other than collecting rent, I'm going to also be making about $850 per month on this thing. If you take that and really want to calculate it out, it would take me about 2.7 years to pay off that 28 K, but I don't care because I'm going to have it for ten to 15 and it's going to be beautiful and I'm not going to touch it and it's just going to be something that I hold on to long term, not to mention all of my equity growth and the equity that I've already built into the property.
So there's a lot of pros and cons to all of this. That was my budget and I’m comfortable with it. I'm comfortable doing that again and here, which, stay tuned, I may or may not be doing. And hopefully this helps you kind of wrap your head around what it may cost you for a little two bedroom, two bath for renovation or maybe a condo project just like my own.