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Wednesday, December 30, 2015

How to do a cost estimate for House Construction?

 

How to get a cost estimate for Home construction?

 

Constructing your house is never easy...and always expensive. It pays to know the costs involved well in advance so that you can plan your budget and prioritize your needs.

While your builder or engineer can always create a cost estimate for you based on your design plan, it is always prudent to have a rough estimate even before you get the design plan ready. Having done your calculations right at the start enables you to put forth right expectations in front of your architect - so that he can create a realistic design plan that fits your pocket.

Now, if you are wondering how to make a 'guesstimate' of the expenses involved in building your dream home when you have no experience in construction, here a few tips to get you started:

Do your own rough work

Take a look at the newly constructed homes and find out the construction cost incurred by the owners. Divide this construction cost by the total sq. ft. area of the constructed property to get rate per sq. foot. For example, if the construction cost is around Rs. 5,00,000 and the home is 5,000 square feet, then the cost per square foot is Rs 100. It would be a good idea to get the rate per sq. foot for multiple homes. Then, multiply this rate with your plot area and you get a rough cost estimate! Add to this an additional 10% to cover unexpected cost overruns.

Also, remember that the cost of construction increases around 3% to 6% every year. So when comparing prices consider homes constructed within the last six months.

Get in touch with a few builders in your locality

Talk to a few builders who have undertaken residential construction assignments in the recent past and get a ballpark idea of how they charge for labor and materials. It would be a good idea to see the construction (if ready) to know what does the cost really include. Some builders use labor contract and materials contract for the process of construction, which makes it easier to estimate the cost of construction.

Labour Contract: Under labor contract, workmen or employees are hired, supervised, and remunerated by or through the contractor. The contractor provides the cost estimate of the labor cost depending on the total time taken to build a house or establishment. In India, the contract labor is regulated by the Contract Labor (Regulation and Abolition) Act, 1970.

Material Contract : Under material contract, labor is charged at specified fixed hourly rates and material is charged at actual cost. The customer agrees to pay the contractor for all the material used at every stage of the construction.

Budget in the following basics while 'guesstimating'

  • Interiors (like woodwork, fittings, etc.) cost more than the brick-and-mortar structure.
  • The most expensive areas in a home are usually the kitchen and the bathrooms.
  • A small home has a higher cost per sq. foot that a larger home, as in larger home cost is spread over larger sq. ft. area. Also, it is cost-effective to build a two-storey construction that a single storey, as a two-storey house has a smaller roof and foundation.
  • It's cheaper to build rectangular or box shape homes than the ones having more angles and corners.
  • There would be additional costs involved like architect's fee, fee for various approval and permissions from the concerned authorities, site preparation cost, etc.
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