One thing that can knock your conduction project off the rails rather quickly is escalating construction costs. This can be particularly challenging when we have supply chain challenges that do not appear to be going away anytime soon. This can significantly raise the cost of a construction project, sometimes derailing it completely because it is no longer economically feasible. We have put together a few tips to avoid that from happening.
Evaluate Material Costs and Possible Escalations
You better believe the contractor is evaluating this market, so you would be very well served to evaluate it as well. A construction project manager would be charged with doing this on your behalf. Looking at trends and projections, you can determine the pricing curve relative to the materials needed for your project.
Construction companies will likely want to build a clause into the contract to protect them from rising costs that could increase the overall cost of the build as the project goes on, but you will also want to protect your investment to ensure you are not seeing material costs that are double and triple the original estimates. It is all but guaranteed there will be an escalation provision in the contract, so make sure you fully understand that provision before signing off on the final contract.
As we mentioned above, we will be looking at trends in the industry for rising costs on very specific materials. As you look over the report, you may consider using different supplies to counter the rising costs of the materials you originally wanted. For example, you are considering special-order cabinets but similar cabinets are in stock. If you hold off on the special order, the cost could rise due to lumber costs, not to mention the construction hold-up on the delay until they are delivered. Adjustments such as this to “in stock” items can lead to significant savings.
This is not an easy process and we understand how it can confuse laymen. We have stated it before, but this is especially true in this type of climate. Unless you can devote yourself full-time to the construction project, you are far better served to hire a residential project manager. Part of their duties is to conduct this analysis to ensure your project comes in within the budget that has been outlined at the start of the project. This is just a small investment on your part that will save you significant money, frustration, and time over the course of the project.
For more information about our residential construction project management services, click here.