Now that you can finally afford that dream house you have always wanted, you have decided to build a custom home in Oregon. If this is your first time building a custom home, there will be some aspects of the process for which you may not be familiar. One of those is developing your construction budget, so we will take a quick look at the different components of that today.
The Components of a Construction Budget
There are five components to developing a construction budget…
- Hard Costs
- General Conditions
- Soft Costs
- Permits and Fees
- Contingency Planning
These will be the costs for construction, supplies, labor, and equipment. For the most part, your general contractor and/or residential construction project manager will give you the estimates for these costs once a design has been finalized.
General conditions costs are considered non-trade costs, such as temporary utility costs for the build, trailer rentals, printing, and dumping services. If you hire a project consultant or project manager, the costs would also be put into this category.
This will be the costs added to the project but that may not be directly tied to the hard construction of the project. Accounting, legal, bonds, and architect fees can all go into this category.
Permits and Fees
These are the fees directly related to the construction project itself, and the fee structure will be set by the local jurisdiction where the build will be taking place.
If you read our blog regularly, you know there will always be some surprises during the build, but this does not always have to be bad. For instance, maybe your builder comes across a great deal on upgraded cabinets, so you decide to take advantage of the lower price while still upgrading that particular feature of the home. You should always put aside about 10 percent of your overall budget for this aspect of the construction budget.
How is the Budget Influenced?
One thing we can tell you is that you should never refer to another project and expect your project to fall in line with those costs, even if it appears to be an identical project to yours. Project influencers can change dramatically and they can change fast, especially in this environment with possible supply chain issues. These influencers are:
- Owner requirements
- Scope of the project
- Size of the project
- Materials and equipment
- Quality of design and build
- Project schedule
I know this seems like an awful lot to digest, especially if you have never worked in the construction industry. This is why we recommend taking on a residential construction project manager or, at the very least, a construction consultant, that can help walk you through the process as well as having an expert set of eyes and ears working on the project directly for you.
If you would like to learn more about these services, please give Better Build Now a call at 888-402-4180, or, if you would like to learn more about these managed residential construction services before talking to someone directly, click here.