Building a house: how much?
What’s a good house-building budget?

Family, friends, acquaintances, and readers often ask these questions. Loaded questions make realistic answers difficult. Construction costs depend on numerous aspects. Building a project costs more than just construction.

People think of the “hard construction cost” when they ask these queries. The “soft costs” of a project are sometimes overlooked. Unfortunately, disregarding these costs causes cost blowouts and budgets well below the amount needed to build projects.

What charges should your project budget include?
Budget for these three home construction costs.

1. HARD CONSTRUCTION COSTS

These are house-building costs. They comprise all material, labour, and general contractor overhead and profit (20–25%).

Excavation, foundation/flatwork, framing, roofing, flashing, gutters, windows & shades, doors, siding & exterior trim, decks, HVAC, plumbing, electrical, insulation, drywall, millwork, paint, tile, cabinets, closets, countertops, flooring, appliances, specialty components (bath hardware, mirrors, fireplace, handrails, decorative
metal), hardscape (patios, walkways, driveways), etc.

Site work, demolition, debris disposal, and the contractor’s job site trailer, port-apotty, site security, specialised tools, etc.

2. SOFT CONSTRUCTION & OTHER COSTS

These are the remaining project costs. Financing, permitting, insurance, professional & engineering, and land acquisition are the most prevalent. The following soft construction costs are examples. property Acquisition: Purchase Price, Financing, Legal fees, Titling, and Documents; all expenditures related with acquiring the property on which the building will be built.

Site Planning: Soils Reports, Environmental Studies, Transportation Studies, Utility, Easement, and Topography Surveys. Professional Fees: Architect, Civil, Structural, Electrical, Mechanical Engineers, Landscape Architect, Interior Designer, and other specialty consultants depending on project size and complexity. Furniture and equipment: Tables, chairs, and other non-built items. Sound, communications, and security equipment added by others may also be included. Window shades are often neglected. Other: Some initiatives require legal, accounting, fundraising, or grant writing expertise.

3. CONSTRUCTION CONTINGENCY FUND

I’ve included this line item because it’s vital to your project budget but not a cost. A contingency fund is set up for unanticipated design and construction costs. These may include subterranean conditions, late-stage change orders, or other unanticipated project costs. Your project may require a 10% contingency fund. This may seem like a lot, but knowing you have money set away for “just in case” scenarios can do wonders for your sanity.

4. CONSTRUCTION BUDGETING

A project budget lists all hard and soft costs and where the cash are coming from. Early project financing identification reduces unidentified cost issues.

When you start your budget, these costs will likely be approximate estimated amounts and projected on the high side. As you make further decisions and the project solidifies, these costs will become clearer.

CONCLUSION

When budgeting for your housing project, cover all costs, not only building. This mistake might be costly.

Say your budget is $75,000. Is this the Project or building budget? This can impact your project and the conversation with your designer/architect who is designing to a construction budget. When you realise you didn’t account for all project expenditures and your building budget is $60,000, your relationship with your designer/architect will suffer.