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Mistakes to avoid when you estimate construction costs

Estimating in building construction depends on a range of factors; your own specific vision, where you want to realise it, and who you trust to get it right. It’s so complex that in the last three years KPMG found just 31% of construction projects finished within 10% of their budget. 

If you want to be in that 31% and still achieve the perfect result, you’ll need to do the ground work and side-step problems before they arise. To help you, we’re taking a look at some of the most common problems that arise when estimating in building construction: and how you can avoid them.

Trento - Consider these tips when estimating in building construction of your own home, and avoid common mistakes.

Design deficiencies

Historically, design problems cause issues in as many as 38% of construction projects. You can avoid them by knowing what you want, but also working out how to realise it. That involves accurately testing ground conditions, including all dimensions and completing risk analyses. Budget for trusted architects and advisors early on, and get full estimates for detailed planning and ongoing consultation where necessary, and you can ensure everything is covered.

Improper planning permission

Planning permission forms a huge part of estimating in building construction. Local support varies enormously, so if you’re more focussed on design than location it can pay to look around for a local authority that supports your ambitions. Bureaucracy and fines for incorrect application also vary, so make sure you budget enough for a good lawyer to get it right first time.

Finance gaps

Construction costs should always include the cost of finance. Self-build mortgages usually require a high deposit, and only release funds at different stages of the building process. You’ll need to carefully manage cash flow to avoid expensive delays. That means mapping out when you’ll pay your various advisors and contractors, as well as taxes and transfer costs. Doing this in advance will help you access the best borrowing rates, and dodge costly short-term finance options.

Forgotten utilities

If you’re building a home from the ground up, you’ll need to make sure you plan for the connection of utilities like electricity, gas, water and waste water. If you’re forced to dig a trench to connect your property to main supply routes, construction costs can quickly escalate. This is not something you want to deal with at the last minute.

Missing amenities

Estimating in building before or during construction is one thing, estimating costs after construction is another. If you’re not careful then the most painful part of the budget comes after you move in. When deciding whether you opt for a custom home on new development sites or an area of your choosing, think about whether you can reach the entertainment, culture or nature you love. Then factor in the cost (financial or personal) of having to go further to get it.

Remember, even with the best preparation there will be changes and unexpected developments which will affect the construction costs. Always have a contingency budget, and be flexible wherever you can to avoid undoing your careful preparation.

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