You may think you have done everything to control your construction costs but still experience unexpected rises in building costs. This is because your building contractor presents you with estimates that may change based on several factors. Here are 12 reasons why your building may cost more than you estimate:
Any flaws in your design will lead to inaccuracies in interpretation and cost estimation. You base your estimates on the size of the building, the type of materials to use, and their estimated costs at the time of costing.
For instance, if the dimensions are inaccurate, you may underestimate the volume of materials you need. This will raise the cost when buying for the actual size of the building. The same applies when you budget for more materials than you need, resulting in wastage.
Your construction estimates will be inaccurate if you benchmark with the wrong project. You may get wrong figures if the building you are using to benchmark was constructed at a different time, with different materials, by different people, and in a different area.
You may not get a building similar to yours that was recently constructed. However, your contractor should use appropriate methods to estimate what your structure will cost based on the actual costs of the building you are benchmarking with.
You may make assumptions concerning working methods, delivery timelines, logistical support, and lead-in times, resulting in inaccuracies. Other people may use your assumptions to make more money from your building project and overrun the construction costs.
Costs of materials and labor fluctuate, creating changes in the cost of construction. If you get your estimates and delay before executing your project, the prices change, increasing the cost of constructing your building. This may affect your planning process. You may need to adjust the size of your project or increase the budget.
A boom in the construction industry skyrockets the demand for building materials and labor. When materials are in short supply, vendors take advantage and increase their prices. You may also pay more for materials if you buy in small quantities as you miss discounts vendors give for bulk buying.
The ability to change your design is good as it gives you control of the process to get your desired outcome. However, with every change, your estimates are affected.
You may decide to change the dimensions of the whole building or part of it. This can lead to an increase in the cost of labor and materials. It may also cause a delay in the completion of the project.
Procuring materials in person saves you a lot of money if you source them from the manufacturers without intermediaries. While this is a perfect way of ensuring you stick to your pre-contract estimates, it may cause a delay in delivery.
Intermediaries may have established relationships with suppliers who may give them preferential treatment and supply them before first-time buyers. However, this may affect the initial stages of the project since you will progressively create relationships to ease the procurement hassle and save you some cash.
Allow realistic wastage considerations in the estimates of your building costs. However, when you fail to control wastage, it significantly increases the cost of your project.
Wastage sometimes results from the working method and materials you choose. For example, if you choose 2.4m ceiling heights, you can use full-height plasterboards without adjusting the length. With 2.3m, you will have to cut and waste 100mm from each board. 2.5m high plasterboards require attaching more boards.
Cutting-edge building construction technology, innovative designs, and premium materials may demand a higher construction cost. Besides the obvious higher cost of bespoke building materials, they may affect building costs as you struggle with inaccurate estimates.
This is unlike when you use tried and tested materials and techniques that contractors, suppliers, and merchants understand and estimate more accurately. Innovation and the introduction of high-end technologies leave the project implementers with the trial and error task that can sway your estimates.
Your contractor may overlook logistics like site insurance, access equipment, documentation printing, site toilets, and debris removal. This comes at a cost, and if they are not included in the estimates, they will increase the cost of your project.
Other often-overlooked costs include delivery procedures. You may budget for materials and transport but fail to factor in permits required to get the materials to the site. Some materials may require additional labor to load and offload.
Your project may delay due to drying times, interruptions in material and labor supply, and weather patterns. Interrupting the program impacts project preliminaries and may result in higher costs such as increased days to pay for hiring mobile site toilets.
If there is a delay in the project timelines, your contractor may abandon the project. A new contractor may be more costly than the initial one, contributing to the soaring of your building costs.
Some contracts specify the expected project cost, scope, and timelines. This requires the contractor to stick to the estimates, design, and expected project completion date.
However, your contract may be flexible on the cost, scope, and time, leaving room for adjustment in design, timelines, and the costs associated with those changes. Since there will always be modifications in some aspects of the project, your contractor should factor in the predictable expenses that variations may cause.
If you picked the contractor with the lowest estimates, the cost spirals as the contractor tries to claw back more profit from the project. This may happen if you are not keen on procurement procedures and work processes.
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