Tips on Estimating Construction Cost

Estimating construction costs is usually an ideal first step in planning out any building project. Assuming you have already acquired or leased a parcel of land, the cost of building and laying out any improvements on it would usually depend on the design, materials, and labor involved. There are, however, a few ways of arriving at a reasonable estimate of how a certain house or building should cost.

Square Footage

The cost of constructing a home or commercial building usually falls within certain price ranges per square foot (or square meter, depending on the preferred measurement in our region). Because there is no single standard of how much a square foot of improvement should cost, you can compare with similar construction projects as a gauge. For instance, you can survey the prices of newly-constructed houses in the same area as your planned construction project with similar features and materials. Subtract the cost of the land (which is usually within a standard range in any particular zone or area), and then divide the remaining amount by the floor area to arrive at the dollar amount per square foot. You can multiply this per-square-foot price with the floor area of your planned construction project to estimate the construction cost.

Construction Materials Costs

Building materials and other finishing materials would usually affect the turnout of a building project. For instance, using more expensive types of flooring like polished granite would definitely be more expensive than using tiles. Using cast-in-place concrete walls would be more expensive than prefabricated walls or cinder blocks. The trade off here is that more expensive materials might add up to a higher cost initially, but in most cases would last longer, resulting in lower maintenance costs in the long run.

Labor and Equipment

If you are hiring your own construction workers, then the cost of construction would be a factor of how many laborers you are hiring. Wages would usually have to be computed on a daily basis, so the longer the construction project, the higher the cost of labor would be. The same goes for rental of equipment. One good way to ensure your costs don’t go overboard is to assign the job to a general contractor, who would be responsible for hiring labor, renting equipment, and subcontracting jobs.

Duration of Construction

Construction projects usually incur cost increases when there are delays. This is brought about by lengthened billable hours by labourers and rented equipment. The price of raw materials like sand, gravel, cement, and other building essentials can also go up through time. There is also the factor of deterioration due to the structure’s interior being exposed to the elements, like heavy rain and sunlight. For this purpose, it’s usually a good idea to allocate a 10% to 20% contingency above the estimated cost of construction.

Professional Fees and Regulatory Dues

Above the cost of actual construction, you should also factor in the fees to be paid to the general contractor, architect, and other incidental expenses. For instance, a contractor would usually have to be allocated 25% of the total construction cost. Architectural fees would usually range from 5% to 10%. You would also have to allocate for building permits, real estate taxes on the land and improvements, and other fees you would need to pay the local government.

For quickly estimating how much a building project would cost, there are several web sites and applications that provide free software that can help estimate costs based on materials, square footage, location, and the like. For instance, websites like http://www.reedconstructiondata.com allow you to browse cost estimates of various building types by state and city.

An informal and rough estimate can give you a reasonably good ballpark figure based on information or data already available. You would need to contract an engineer for a detailed estimate of costs, including materials, labor, and other incidental costs for a more accurate figure. Still, if you’re in the planning stages, determining costs from informed estimates would be helpful in deciding whether a construction project is viable or not.