With approximately a 13% share of the world’s GDP, the construction industry is one of the economy’s critical drivers. Many people dream of owning a home while others are unsure whether to buy or rent a house.
Talking of the construction cost entails the total costs incurred when building a house by an individual or a contractor. Getting the exact value of construction is very hard because construction is in itself variable.
Due to the complexity of projects, I’ll break down the costs and factors you have to keep in mind when planning to start constructing a new building. For this article’s purposes, I’ll assume that you already own the piece of land you are planning to erect your structure.
- Material cost
This is the most basic, yet takes a significant share of your money when building. Different materials have different pricing, and it’s best to use quality and affordable materials. You can always explore the construction industry’s new trends to choose the best method for erecting your structure.
New technology in the construction industry has seen the introduction of prefabricated panels (onsite and offsite), which uses minimal raw materials and reduces the overall costs significantly.
You have to consider the number of workers you will have and the amount each of them will rakes. Labour is expensive in some regions than in others. In New York, the cost of labour is costlier than other states and thus increased construction costs.
It’s also essential to cover construction projects against risks. For this reason, it’s worthy of your construction project for protection.
- Fees (accounting, design, consultant and so on)
- Offsite costs
- Landscape costs
Factors that determine the cost of construction
Below are some of the key factors that determine the overall costs of a construction project.
Climate plays a crucial role in determining the cost of your construction project. The cost of construction is highly dependent on the environment in which the building is being constructed. For instance, a building in cold areas means you will deal with massive during the construction, which will inflate the prices. Similarly, materials used in different climates affect the project’s costs too. Interior and exterior touches vary with weather, and so does the costs.
- Type of building
The type of buildings determines the cost of a construction project by a great deal. For instance, commercial constructions such as convenience stores are cheaper to construct as compared to complex structures. Also, storey buildings are more expensive to build as compared to their counterparts.
- Finishes and appliances
Finishes and appliances also play a major role when determining the overall costs of a construction project. If you install luxurious finishes and appliances on your house, then the pricier the construction will be and vice versa.
- State Laws
Laws that touch on the construction industry have an impact on the overall costs. For instance, the projected increase in steel tariffs by Trump could soar the construction costs.
Having all the above in mind, you will plan appropriately and set a realistic budget for your upcoming construction project.