One of the vital tasks of the builders is cost estimation for construction projects for successful building.
Construction cost estimation is the calculation of the possible cost of your construction project keeping into consideration the prices of material, labor, etc.
In this article, we will discuss construction cost estimation for your better understanding.
Why is cost estimation of construction projects important?
Accurate and detailed construction cost estimation paves way for a successful project.
In the department of building construction, various types of estimations are used by the owners. For instance, owners use a type of estimation to examine if the project cooperates with the budget. For winning a bid the costs of the estimations are also compared with different contractors.
Now let’s have a look at the advantages of construction cost estimation:
Improves plans: When you review the cost estimation you get a chance to correct your errors in the specifications before building which can be valuable.
Better bid comparison: Owners who possess construction bids can analyze contractor bids with more wisdom. This means that the owner will know how much profit the contractor is including in his bid. This will help the landlord to figure out which bid cost is fair enough for them.
What are construction cost estimation techniques?
Below are the 3 types of construction cost estimation techniques:
Professional judgment:
When a professional carry out the estimation, he takes care of even the tiniest detail and provides you with a complete and accurate estimate. Therefore, the precision of the method depends on the project team.
Analogous estimate:
In this technique, the data from previous similar projects are used to create a rough estimate for your projects. However, the adjustments are made according to the differences of the new project. In this way, the construction cost estimation is done soon.
Parametric estimate:
A parametric estimate refers to the statistical-based technique to enumerate the expected amount of budget required for the completion of a project.
What are the costs that are included in the construction cost estimate method?
Construction cost estimation incorporates all the expenditures that are required to transform a piece of land into a full-fledged building ready for tenancy.
However, the construction cost does not include the cost of furnishing the project or the price at which the land was obtained. These costs are added to the project cost estimation.
These are the types that are incorporated in construction cost estimation:
- Equipment: The overall costs of the equipment required during the construction add up to the construction cost. These can be rental, leasing, or amortizing costs. The equipment used can be cranes, movers, loaders, bulldozers, etc.
- Indirect costs: Indirect costs are the ones that are important but are often unnoticed. For instance, permit and inspection expenses, administrative fees, legal bills, technology budget, insurance, security charges, and utilities are all indirect costs that make up the construction cost.
- Labor: Labor costs, wages, and the number of workers along with their overtime must be kept in mind while calculating construction cost estimation.
- Materials: There is a wide range of materials that are required during a construction project that include nails, cement, screws, wood, concrete, bricks, ceramic, metal plastic, etc.
- Professional charges: The different professionals that are required to complete a construction project must be considered like architects, engineers, electrical engineers, etc.
- Quality and design: The quality and design of your building project also fluctuate the cost. Superior amenities, top-class fixtures, aesthetically impressed layouts, a striking structure, and distinguished architectural details are more expensive. The commercial buildings are graded as A, B or C specified as high, average, or below average quality, respectively.
This is all about construction cost estimation. Furthermore, when you hire someone for cost estimation of construction project make sure it is a reputed company or a well-trained individual.
