According to Gary from Gary Pools, a fellow blogger I follow, he shares with me that many people don’t consider pre-construction costs when thinking about their construction projects. Pre-construction costs are the expenses incurred before the actual construction process. Basically, you should be prepared for these expenses before you lay the first brick. Though pre-construction costs vary from one project to another, some are common in all projects.
Some of the most common costs incurred before the actual construction commences include planning costs, purchase of materials and pre-construction interest. Any expense incurred before the actual construction commences falls under pre-construction costs.
Pre Construction Planning Costs
Preconstruction planning is an important stage of a construction project. It involves planning out the project and determining its scope. Preconstruction planning involves scheduling different tasks and budgeting for the project. The purpose of this planning is to ensure that the construction project is completed smoothly and in a timely manner.
Preconstruction planning costs vary from one project to another. That’s because factors like scope and location influence preconstruction planning. Nevertheless, preconstruction planning costs take up 1 to 3% of the total cost of the construction project.
Saving Money with Pre Construction Planning
Preconstruction planning is not free. However, it can save you a significant amount of money on the entire construction project. That’s because contingencies are built into the construction budget. The contractor uses their expertise to predict different scenarios and prepare for them accordingly.
What’s more, you can work with your contractor during pre-construction planning to exploit the available cost-saving opportunities. For instance, you can work with the contractor to take advantage of cheaper building components or materials. This can end up saving you a significant amount of money. If you take out a loan to build a home, you will be required to pay the loan interest in full before the project is completed. Consider this too and work with your contractor depending on when you expect the project to be completed.
If you have an upcoming construction project, factor these preconstruction costs in when budgeting for it.