Here are costs that can go into your construction project.
Trying to determine your construction project budget isn’t always easy. After all, there are a lot of factors that need to be considered when putting this budget together, and some of these factors can be quite abstract, making it hard to put a price on them. Here are costs that can go into your construction project.
Hard Costs
Some costs in your project budget are more concrete than others. These are your hard costs, which include materials for your construction project, as well as the labor that’s carried out during construction.
A general contractor, a subcontractor, or a material supplier will figure out the hard costs of your project. The exact price will change based on the types of materials you use, desired markups, and the regional labor rates.
When establishing a construction project budget, contractors will determine the steps that are needed for a project’s completion. This lets them break the budget down for each step of the project.
Soft Costs
Soft costs are expenses that are typically acquired either before or after your construction project is done. These expenses are a little more abstract. Instead of concrete materials, soft costs come in forms such as: legal assistance, accounting consultants, bonds, insurance, and design fees. Not every one of these costs will necessarily be present in your construction project budget, so it’s possible that you won’t need to include some of these costs.
Oftentimes, insurance companies and consultants are the ones who set these costs, and they’re typically calculated as percentages of the cost of construction. As an example, design fees could be around 10-15% of your construction expenses.
Fees and Permits
Prior to any construction project, there are fees that come with reviewing and inspecting the project. These fees are often mentioned as a line item for your construction project budget.
Projects that involve creating new buildings will typically have added costs. These costs are called system development charges (SDCs).
Local jurisdiction will be responsible for setting fees for plan reviews and permits. If you want to have an estimate for your project fees, you should contact the permit center and give them a thorough description of your construction project.
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