How to estimate renovation cost per unit

The short version

1. Decide the scope for each floor plan.
2. Measure one unit of that floor plan.
3. Price each item as a range from your market's costs.
4. Add 10% for surprises.
5. Multiply by the number of units of that plan, then add buildings, roof and site.

The rest of this page explains each step.

Step 1: decide the scope by floor plan

Units with the same floor plan get the same scope, so work one floor plan at a time. Most value-add plans offer two levels, which this guide calls classic and premium. These are common names, not an industry standard, so define yours:

• Classic interior: paint, flooring, light fixtures, faucets, hardware and a toilet or two. The unit looks fresh and everything works.
• Premium interior: everything in classic, plus the larger items such as cabinet fronts or new cabinets, countertops, backsplash and appliances.

Before you price anything, separate the bones from the cosmetics. A failed water heater or a leaking drain is not an upgrade choice. It goes in the budget either way. The unit walk checklist shows what to look for.

Step 2: measure one unit per floor plan

Quantities come in three kinds, and every cost table uses one of them for each item:

• Square feet: flooring, painted surfaces, drywall repair.
• Linear feet: baseboard, countertop, a run of cabinets.
• Each: a faucet, a toilet, a light fixture, a door, an appliance.

Measure one typical unit of each floor plan and let it stand in for the others. Walk a few more units of that plan to check that it is typical. If one of them is far worse, treat it as its own scope instead of averaging it away. Without measurements, take quantities from the floor plan, and widen your range to match how much you are guessing.

Step 3: build a cost table with ranges

A cost table lists each item with a low and a high price per unit of measure for your market. Get the prices from local contractor bids, supply house quotes and your property manager's recent invoices. Use a range, not one number, because the same job costs different amounts on different days and in different buildings. A single figure hides your uncertainty. A range shows it.

Prices differ by city and change over time, so date your table and refresh it on every deal.

Step 4: worked example for one unit

Example a one-bedroom unit of 700 square feet, classic interior. All prices below are made up to show the arithmetic.

Add the low column, then the high column, then take 10% of each. In this example the unit costs $4,169 to $7,084. Keep the range all the way through. Only at the end do you decide which end of it to plan around.

Why 10% for surprises

You cannot see behind walls, under flooring or inside a drain line during a walk. Something will cost more than it looked. A flat allowance for surprises, called contingency, keeps one bad surprise from breaking the budget. Ten percent is a common starting point. Raise it when you could not see many units, when the building is old, or when a unit hides water damage. Lower it only when a contractor has bid the work.

Step 5: from one unit to a budget per door

Example a 40-unit property with two floor plans. The one-bedroom unit above has 24 units. The two-bedroom has 16 units, and one measured two-bedroom came to $5,200 to $8,900 per unit, surprises already included.

Divide by 40 for the budget per door: about $4,581 to $7,810. Then add what is not inside a unit. Example: a $60,000 allowance for roof repair, pending a roofer's inspection, brings the example to $243,256 to $372,416. Roofs, parking, landscaping, fences, signs, laundry rooms and clubhouses each get their own line, because they are part of the property too.

An allowance is a placeholder you replace with a real bid once a specialist has looked. Mark it as an allowance so nobody mistakes it for a quote.

Common mistakes

• Using one price per item instead of a range.
• Pricing only the vacant units and assuming the occupied ones match.
• Leaving out the roof, the site and the common areas.
• Mixing the bones with the upgrades in one number, so you cannot cut an upgrade without cutting a repair.
• Forgetting lost rent. A unit under renovation is not paying, so the weeks it sits empty belong in your deal model next to the budget.

Ask your property manager and contractors to check your numbers before you rely on them. They know what your market charges today.

How DoorWalk does it

DoorWalk follows the same method. You walk and confirm a list of fixes, one measured unit stands in for its floor plan, and prices come from a cost table by market, never from AI. The table covers the national average plus Dallas-Fort Worth, Houston, San Antonio, Austin, Tampa, Orlando, Jacksonville and Miami. Each fix shows as a range with a confidence level, and 10% for surprises is added. Open the example property to see the Costs screen.