On hearing the term construction cost estimation, what comes to everyone’s mind is the figure evaluation of any structure or building of all types. Isn’t so? To stay lucrative throughout your construction process, it is necessary to get things right from the very start. The most crucial part of it is to estimate building construction costs. In case of underestimation, you will have to pay a great chunk from your pocket. On the other hand, if you go for overestimation, it is impossible to win valuable bids. So, the consequences of an inaccurate cost determination make the contractors and estimators see the errors in their way. One small mistake can make you suffer a lot in the form of losses and image deterioration.
Building construction cost estimation has much to do with the planning and execution phase of the construction project. No matter, what sort of construction you have started with, whether it is a commercial project or residential or industrial project, there is a need to get accurate cost figures that are involved in it from start to end. Here is something for you to understand. There is always a reason behind estimating a building’s cost. Every entity associated with the construction project has an interest in it, as each unit cost holds value in the entire estimation process. For your ease, we have derived a complete guide on how to estimate building construction costs so that you can stand out at winning positions throughout while maintaining your business profitability.
The Essence of Construction Building Project Estimation
You might wonder why there is much focus on estimating building costs. The reason is it tells the feasibility state of the project you are carrying on with. It assists the owners or builders in determining the profit margins, resource allocation and project scheduling matters. Accurate estimation creates a thought-provoking channel that sets a controlled budgeting standard for the project. Consequently, you become able to make decisions well-versed with the ongoing project condition. Manual estimation is certainly a time-consuming yet authentic procedure but with the help of software, the job has become quite easy and quick.
Factors That Come In The Way of Estimating Building Cost
Construction estimation is not as simple as it sometimes seems to be. There come many factors that interfere while preparing the cost of building construction. Let us guess what these are.
Size and Formation of the building:
It is obvious, with an increase in the magnitude and complexity of the building, the cost of construction will go up too. The cost associated with building materials or takeoffs, labor man-hours, and tools & equipment account for an increase or decrease in the total building costs.
Similarly, the location of building construction has a lot to do with the cost fluctuation of materials, labour, and equipment. For instance, buildings constructed in urban localities have an upward price trend owing to high resource demands as compared to the rural construction
Quality and Quantity of Construction Materials
The superior the quality of the material used in construction, the high is the cost of building construction projects. On the other side, the situation is the opposite in the case of inferior quality. The type and quantity of material also have a role in cost determination. As you know well, wooden construction is comparatively cheap than steel-framed construction.
Building Condition and Layout
The building layout and its condition affect the total construction cost to a great extent. You should consider whether the building has high-end specifications like marble finishing or costly appliances or it requires a basic appearance. Complex structures always cost more than simple ones.
Labor section also makes the total construction cost go up or down. It includes the proficiency level of the workers, the finalized wage rate & man-hours, and the construction category work performance that comes under different levels of workers.
What to Consider In the Construction Cost Estimation
To estimate building construction costs every element that holds some value will come under the analysis. Whether you are doing the estimation yourself or hiring a professional construction estimator, utter vigilance in the whole process is necessary. The total estimate is the combination of direct and indirect costs. Indirect costs are petty bills that are not visible but make a huge difference if not added. These are the rents, utilities, maintenance charges, taxes, and bid preparation costs. Direct costs are the huge occupying section of the overall budget. Check the details below.
This head is the most critical part of the construction cost and sums up around half the total cost. To calculate the labor cost correctly, you need to know the project completion time and its time of commencement. There must be some flexibility in the budget to cater to contingent factors like increases in wage rates or changes in economic conditions. Otherwise, you will fall victim to budget overrun.
Quantity Take Off
Quantity take-off comprises a comprehensive record of each and every material that is required for a particular building construction. It starts with counting lights, doors, air-conditioners, wiring, windows, ceiling, flooring, nails, switchboards, etc for estimating the total cost. Accurate cost consideration of such items can assist in offsetting the difference between the estimated and actual costs.
Unit Material Cost
Quantity takeoff tells a complete picture of which material is going to be used in the construction but the prices of materials may subject to vary owing to several factors. For instance, prices can change from one location to another, materials can have different delivery charges and quantity discounts available at one place may not be present at another, thus can make difference in the final cost,
Tools & Equipment Prices
Besides other cost elements, equipment also shares a part in the cost evaluation. The purchasing cost of the tools & equipment and its security charges should be taken into account to estimate building construction costs.
Whichever task you are working on, either commercial construction estimating or residential building evaluation, you must think from a 360-degree angle. You should put in all the factors affecting the final estimation and possible contingencies to leverage a reliable and up-to-the-mark building construction estimate.