7 Ways To Estimate Construction Costs Accurately
When planning to construct a new building or renovate an existing one, you need to estimate the construction cost accurately. An accurate estimation will help you keep the project costs within budget and prevent any nasty surprises later on.
If you underestimate the construction costs, there is a high risk that your project will exceed the budget. On the other hand, if you overestimate the costs, you will spend money unnecessarily.
Unnecessary spending is also something that can lead to an increased final bill. An easy-to-use construction estimating software will help you to estimate the construction cost accurately. Here are seven ways in which you can estimate construction costs accurately:t
1.The 100% rule
The 100% rule is a very useful tool that you can use to determine the total construction cost of any project. It is based on the fact that you can always find at least two contractors who can quote the same total cost for the same job.
The 100% rule works like this: You will need to choose a contractor who will quote one price and another who will give you a second price. Then, you will compare both quotes and see which one is more accurate.
2.Mutually exclusive
It won’t be easy to estimate the construction cost accurately if you have a large project. The reason is that there are so many factors that can affect the final cost of your project. This is why you must ensure that each factor is mutually exclusive from other factors.
For instance, if you want to build a two-story house, it would not be accurate for you to include all the costs for a single-story house in the same construction cost estimate. You should estimate only what is necessary for your project and remove everything else from the total costs.
3.Outcomes, not actions
While you are planning your next project, make sure to take a look at the outcomes you want to achieve. It is optional to include all the detailed plans in your budget.
If you want to increase the sales of a new store or improve customer satisfaction with a new building, it will be sufficient to mention these outcomes in your budget. This will help you keep an eye on whether these outcomes are achieved.
4.The 8/80 rule
The 8/80 rule is a tried and tested method used by construction companies to estimate the cost of building materials. The rule states that 80% of the material costs are needed to build a single-family home. For example, if you plan to build a house, you will need around $80,000 worth of materials.
This is an excellent tool to get an estimate of the total cost of your project. You can use this information to create a budget for your project and adjust it as you move through the stages of construction.
5.Three levels
To create a budget, you need to create three levels. The first level will be your baseline – the cost of materials and labor you will use to build the house. The second level estimates the cost of finishing work, such as brickwork, painting, plumbing, and electrical work
And finally, the third level will cover all other costs not included in the first two levels. This will include taxes and insurance.
6.Make assignments
An easy-to-use construction estimating software will help you to make the assignments quickly. Assign each part of the house to a specific person. You can also assign them to different stages of construction. You can also assign different tasks for electrical and plumbing work.
7.Unit Pricing
Unit pricing is a costing that determines the cost of materials and labor by quantity. You can also use unit pricing to determine the cost of finishing work.
This type of costing is often used in construction, especially by building contractors, because it allows you to control costs and save money.
Conclusion
A cost estimate is a very important document. It is a significant part of the construction process. An easy-to-use construction estimating software is a must for a construction project.
It will provide you with much-needed information. The cost estimate will help you determine the amount of money you will need to spend on building materials, labor, and finishing work.
