Every construction project beyond putting a new coat of paint on the walls and completing a few minor repairs on the walls will require a building permit issued by the local municipality. If you haven’t got that permit when you start working on your rehab property, an inspector can show up at any time to ‘look over’ your work and make sure you’ve got permits for it. If you don’t you’ll be subject to a hefty fine and possibly ordered to stop work.

Getting Your Permits

There are lots of permits for different projects and plenty of building permit requirements you have to meet in order to get each permit. Plus, each municipality is different in the kinds of applications, paperwork and documentation they require. You’ll want to head over to the county courthouse or building department a good amount of time before you start working on that rehab property. This gives you plenty of time for the permits to go through on the project.

Think about heading over to get permits as soon as you get the property inspected and you’ve estimated budget costs for different parts of the rehab. You may not even own the property yet when you head over to get the process started for your building permits.

As mentioned, building permit requirements vary from place to place, but you can usually rely on needing the following things:

• House plans or plans showing the addition or remodel of your rehab property

• A building permit application

• Payment

• Survey of the property lot

However, the building departments are usually very helpful in letting you know what kinds of information you’ll need to bring in and which permits you’ll need. All you need to do is come with a positive attitude, and provide all the information about your rehab property.

A Plethora of Inspectors

Depending on where you are rehabbing, you may get a plethora of inspectors dropping in to check up on your work and make sure you are meeting your building permit requirements. There can be as many as five different inspectors who come out to your rehab property during the remodeling period:

• Building inspector

• Electrical inspector

• Plumbing inspector

• Health inspector

• Financial officer

The financial officer isn’t so much an inspector as the guy or gal who releases loan money to you on completion of all the inspections on the property. You’ll probably be dealing with a financial officer if you get an investor rehab loan or construction loan from the bank to rehab the property.

What’s this going to Cost Me?

Everyone complains about the cost of their permits, probably because you’ll be paying the fees out of pocket before you actually sell the rehab property. However, in the long run it’s a lot cheaper to meet the building permit requirements and pay a small fee up front. Since really, your only other choice is getting caught without a permit in a surprise inspection and having to pay a much larger fee!

Permit fees don’t all come at the same price. Rather than charging a flat fee for a building permit on a rehab property, many municipalities charge a percentage of the estimated final market value of the property. Don’t freak out though. Most cities will only charge you about 1% of the final estimated market value for the property permit. So, the fee isn’t too outrageous.

However, you will definitely want to keep these fees in mind when setting up your rehabbing budget. Say the estimated market value of your rehab property is going to be $125,000 after you’ve completed the remodeling. About 1% of that is $1,250 that you’ll need to pay up front just to get the permits after you’ve gone through the trouble to meet all the building permit requirements.

Any way you slice it, you’ll be spending a good deal of time and cash on getting the permits for your rehab property. You’ll have to fill out paperwork for different permits, then you’ll need to meet the city’s building permit requirements, let inspectors walk through the property and you’ll also have to pay for the permits. It’s worth the effort in the end, as you’ll have a well built house that will last your homebuyers years to come.