As the demand for rental homes increases, contractors in the apartment construction industry are facing a surge in new project opportunities. However, accurately estimating the cost of building an apartment complex can be a daunting task, especially for those who are new to the industry. This guide outlines the key factors to consider when preparing a cost estimate for building an apartment complex, as well as the regional differences that may impact the overall cost.
Industry Outlook and the Impact of COVID-19 on Multiple Building Apartment Construction
The apartment construction industry has experienced significant growth in recent years, with the demand for rental homes surging as more people opt to live in multi-family units.
This growth was briefly curtailed in 2020 due to the COVID-19 pandemic, but it looks like the industry is starting to recover. With more people returning to work, contractors are able to hire more workers for their projects, which can help to reduce costs by allowing for bulk purchases of materials. However, small contractors may struggle to keep up with the increased demand for estimates and takeoffs for new projects.
Factors to Consider When Preparing an Estimate for Building an Apartment Complex
Accurately estimating the cost of building an apartment complex requires careful consideration of a number of factors, including:
Material: The type and quality of materials used can significantly impact the overall cost of the project. For example, budget-minded clients may opt for lower-cost materials, while those looking for a more luxurious apartment complex may be willing to pay more for high-end finishes. As a contractor, it is important to understand your client’s design expectations and budget in order to provide them with the best options for their project.
Location: The cost to build an apartment complex can vary greatly depending on the region or location. For example, the lowest cost is typically found in the South region, while the highest cost is typically found in the East region. When preparing an estimate, it is important to consider the local market conditions, including the demand for apartments and the level of competition among contractors.
Material delivery: The cost of delivering materials to the construction site can impact the overall cost of the project. Factors to consider when estimating material delivery costs include the distance from the supplier, the mode of transportation, and any special handling or storage requirements.
Labor costs: The cost of labor can vary depending on the region and the availability of skilled workers. In areas with a high demand for construction workers, labor costs may be higher. It is important to research local labor markets and negotiate fair wages in order to keep costs under control.
Finishes and amenities: The cost of building an apartment complex can be significantly impacted by the finishes and amenities included in the project. For example, high-end finishes and luxurious amenities may increase the overall cost, while more basic finishes and amenities may result in a lower cost.
Regional Differences in Cost to Build an Apartment Complex
As mentioned above, the cost to build an apartment complex can vary significantly depending on the region or location. On average, the cost per square foot for an apartment complex ranges from $318 in the South region to $453 in the East region. Other factors that can impact regional differences in cost include the cost of materials, labor, and local market conditions.
Building an apartment complex can be a complex and costly endeavor, but with careful research and consideration of various factors, contractors can accurately estimate the cost of these projects. By understanding the needs and
We Can Help, Experts at Multifamily Takeoffs and Estimating
If you’re planning a multi-family building project, you know that there are countless details to consider and tasks to manage. From working with building councils and suppliers to preparing an accurate estimate, it can be overwhelming. That’s where Rocket Takeoffs comes in.
As a reputable estimate company with extensive experience in takeoff and estimation for builders and investors, we have a dedicated team ready to help you with your project. We offer a detailed breakdown of materials, floor by floor and building by building, so you can have confidence in the accuracy of your estimates.
Don’t let the complexity of your project hold you back. Let us take care of the takeoff work, so you can focus on other important tasks. Contact us today to discuss your project and see how we can help.
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Excel Spreadsheet Material List. Editable & Accurate Results. Comprehensive Information with a Detailed Breakdown in Quantities. (Example below is based on Scope at the time of the project, to see an up-close example: Click Here)
In addition, you also receive a color marked drawings of your plans so that you can review the areas that were considered in your takeoff.
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Multi-Family and Apartment Takeoffs Services As the demand for rental homes increases, contractors in the apartment construction industry are facing a surge in new project opportunities. However, accurately estimating the cost of building an apartment complex can be...
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Being a commercial painting contractor, it is crucial to pick the best commercial paint sprayer for the job. While working on large painting jobs that require the application of paint to surfaces like roofs, decks, fences, or walls, you should look into using a commercial paint sprayer.
Investing in a good commercial paint sprayer will help ensure that your job goes smoothly, doesn’t take longer than expected and turns out just like you had hoped.
While there are many different kinds of paint sprayers on the market, not all of them are created equal. Some paint sprayers are designed specifically for residential use and will not hold up in a commercial setting, while others can be used to paint houses or vehicles but may not be capable of being used on large surfaces such as walls or ceilings.
In order to choose the best paint sprayer for your needs, you should first consider your budget and how much you will be using it to determine the specific features you’ll want to look for in a model.
Commercial paint sprayers vary greatly in quality and price; this article will help you decide what kind of sprayer will fit your budget best and what features are most important when picking out your commercial paint sprayer.
These machines are designed to coat large areas quickly with high-quality finishes, but there are many models available on the market today that don’t always live up to their promises.
To help you determine which commercial paint sprayer will be best for your particular job, we’ve put together this guide to choosing the best commercial paint sprayer for your project and your budget.
For painting commercial jobs like decks, fences, and sheds; you need a paint sprayer that offers adjustable spray speed and pressure. It offers you full control on the paint flow and so while you’re painting you’re controlling everything. That’s actually what we’ve loved the most about Magnum X5 Airless Paint Sprayer.
Because of the cart and the ability to support 75 ft. of hose, you can easily slip around job site quickly and easily. Moreover, the light and portable stand design makes it easy to move around the project. The spray gun comes with a filter that can easily catch debris and prevent tip clogging. With PushPrime, you got fast and reliable start-up.
The suction tube is pretty flexible and can easily hold one to five gallon bucket of paint that makes you ready for real commercial projects. Plus, when the need arise to clean the sprayer, you can connect the PowerFlush adapter and you’re good to go.
What We Like!
Minimize overspray
Offers one-pass fast coverage
No thinning required
In case one side of spray tip is clogged the TrueAirless spray tip allows you to reverse and keep spraying without a delay.
1-hand carrying handle for easy mobility.
It allows you to use 10 different TrueAirless spray tips to suit for your project and type of coating.
Things to Consider!
It has an annual use recommendation of up to 125 Gal. per year
The Control Pro 130 Power Tank Airless Stand Paint Sprayer by Wagner is not just to spray latex paints but it can take good care of any un-thinned materials.
We love how easy it makes for you to achieve professional finish on any surface with less overspray. Be it an exterior of your home, a large deck, some fence, or interior walls; it’s best for all.
If you’re finding hard to do your projects mess-free, give it a try. It has got the amazing spill resistant lid that keeps paint pristine and free from contaminants.
It produces 55% less overspray than traditional airless sprayers because of the High Efficiency Airless (HEA) technology.
While moving around a project, the flexible 25 ft. hose and 1.5 gal tank are pretty easy to tackle. Plus, after finishing a painting job, you can easily flush and rinse the system.
Features a 25 ft. hose that allows you to complete mega projects without any stoppage, plus you can reach tall areas like two-story homes.
What We Like!
Ideal for continuous painting commercial jobs because of the ability to hold 1.5 gal. of material in the hopper.
No mess priming and cleaning
Fast gravity fed.
Best for both painting and staining.
25-ft hose with 1.5 gal tank are easy to move around a job site.
Things to Consider!
Sometimes it doesn’t perform well on indoor use as a result of overspray.
It is not be ideal for a small patch or a small area like a kitchen or a room.
The lid is a bit flimsy, doesn’t stay closed or secured.
If you’re new to paint sprayers as a contractor, you might get some training prior trying this piece.
It works flawlessly on large commercial painting jobs. With the adjustable spray speed and pressure, you can apply paint or stain on decks, fences, and sheds. You can increase the pace of your work if you’d prepped it before. It has got a pretty long hose i.e. 100 ft. that makes maneuvering around job site quick and easy.
The metal spray gun i.e. SG2 comes with a filter inside the handle to avoid debris clogging the tip. Depending on the project requirements, you can choose the size of bucket (1 or 5 gal.) of paint and the suction tube is fully adaptable.
Annual use recommendation is up to 125 Gal. per year
What We Like!
Speed, precision, and quality is best with it.
It offers even coverage resulting in professional finished painted product.
Offers support upto 100 ft of hose that allows you to work on upper stories of the house without much hassle.
It do come with an in-handle filter to avoid tip clog but even if there’s one you can reverse the tip of the spray to avoid work stoppage.
Offers reliable start up with PushPrime feature.
No paint thinning is required.
Things to Consider!
The hose is bit stiff; you might buy a swivel piece to help fight it.
You might have to spend some time for prepping the surface before using spray paint.
Got the best paint prayers, now what’s next?
Start bidding on commercial jobs with the help of Rocket Takeoffs!
As a commercial painting contractor, you’re always looking to enhance and boost your business and profit margins. You take steps like enhancing your team and investing in more efficient and workable gadgetry. There’s no doubt that your reputation and quality of work is a critical factor in making profits and keep your customers returning for more work.
But at the same time, you need to stand out among competitors in offering an affordable service. That’s where you also need to focus on reducing wastage and do accurate estimates to avoid budget overruns and optimize material usage. You also need to survey and understand market conditions and know the type of projects that match well with your skills.
To boost your business as a painting contractor, you need to bid and quote on more jobs. That’s where outsourcing your takeoff and estimation services are an ideal approach.
Being a reputable takeoff and estimation company, we at Rocket Takeoffs have been helping commercial painters with a more accurate takeoffs and a bid that actually converts. We help you in optimizing your resources, reducing overheads, and boosting your business in a matter of time.
Multi-Family and Apartment Takeoffs Services As the demand for rental homes increases, contractors in the apartment construction industry are facing a surge in new project opportunities. However, accurately estimating the cost of building an apartment complex can be...
Best Commercial Paint Sprayer-Professional Review Being a commercial painting contractor, it is crucial to pick the best commercial paint sprayer for the job. While working on large painting jobs that require the application of paint to surfaces...
Building Material Price Guide 2021 – Lumber Prices – Rising Prices As we progress through extraordinary times, contractors are getting complaints from their clients about the overall increased prices of construction projects. In...
Building Material Price Guide 2021 – Lumber Prices – Rising Prices
As we progress through extraordinary times, contractors are getting complaints from their clients about the overall increased prices of construction projects. In similar, NAHB has recorded a price spike for a new single-family home by as much as $24,386 since April 17, 2020. That makes 180% in comparison to what homeowners were paying since last spring.
Experts are foreseeing the prices to stay high for almost all construction materials and products, like lumber, iron, steel, Gypsum, and ready-mix concrete. But what has caused such a massive surge?
There are a host of factors and reasons to blame, but in a broader perspective, the same basic cause is related to the gap between supply and demand. But to be specific, it’s that combo-effect of stimulus inflation, increased demand, and supply chain issues due to COVID-19. The production mills and factories are facing lockdowns or slow production amid the pandemic.
But at the same time, people are made to stay home with mandated work from home policies. With such, more homeowners are looking to take the plunge of home improvement and renovation projects. Moreover, they are not spending money traveling and touring; now, they are spending the same on home renovation projects. There is as much as a 30% rise in the number of projects year over year. That is one part of the issue on the demand side.
Contractors are now starting to look for ways to neutralize the impact by managing overheads and reducing the overall cost of construction projects. They are starting to pinpoint the mistakes related to direct and indirect costs contributing to the price spike.
So, here’s our guide on the soaring prices of construction and building materials and how a contracting firm can tackle to reduce the impact on their business and avoid cost overruns. The surge in Construction Material prices.
Lumber Price Increase
Owing to the plethora of benefits of lumber products, we see its applications across the construction of the entire home. They are used not only for framing but also for insulating and finishing. Such an extensive use means to have a greater impact on the overall cost during a price spike. The same has happened amid pandemics.
Here’s how we now know lumber by the number. Lumber prices have soared in recent months and are going through the roof across the States. Business Insider has reported a price spike in lumber by more than 250% compared to the cost of last year. While comparing the latest prices by the Random Lengths of lumber, it is noted as $975 per thousand board feet, which is 180% of $350 per thousand board feet noted in April last year. These averages by NAHB are based on softwood lumber used in structural framing, sheathing, flooring, and underlayment. Their prices have spiked to about 112% higher than the price of the previous year.
NAHB has attributed the escalating lumber prices to insufficient domestic production while lumber mills call for prompt action to address supply shortages. Such issues have harmed not only small businesses and homeowners but also the overall economy. The findings of home Depot are also no different. They have recorded the prices increase for all lumber products based on various factors.
Now apart from the reasons just explained above, there’re some other reasons too. With interest rates stumbling low, there’s a surge in demand for new housing, giving builders reason to increase production. Lumber is also more in demand due to increased delivery of durable goods shipped on wooden pallets.
For the supply part, there’re reasons too. Suppliers and mill operators were expecting the demand to stay low, following the same trend in 2019. But then the COVID breaks in, and they’re left with an unexpected boom with housing as one of the brightest spots in economic recovery. In the aftermath of COVID and in an attempt to comply with the social distancing rules, mill operators find it hard to manage supplies.
Iron and Steel Prices
The case of iron and steel is no different than lumber. The rebar you use in concrete pours has spiked by 20% at just the start of this year. That can make your concrete pours as much as $200,000 – costlier than ever before. Such a price gain has a rippling effect skyrocketing the costs of drywall, copper, steel studs, and even vinyl siding. Now steel is in hardware and a lot of products, so they all follow the same trend.
According to the Producer price index, iron and steel scrap has seen a rise in the cost of 50.6% over 12 months. Associated Builders and contractors have reported a rising trend in prices for fabricated structural metal products, iron, steel, and steel mill products.
Gypsum based products
Homeowners prefer Gypsum in interiors as plasterboards as partitions and the lining of walls, ceiling, roofs, and floor. But with the surge in demand for drywall and insulation, the prices of Gypsum-based products have risen by as much as 1.5% in the first quarter of this year. Compared with the cost pattern of the past 12 months, the producer price index (PPI) for gypsum products has increased 6.3 percent.
Steel mill products
The price of steel mill products is also a major concern for contractors and merchants dealing with blooms, ingots, slabs, and sheets. The prices of steel mill products have climbed by as much as 22%. A concerning aspect of such a spike is the rapid pace of the increase over the past seven months.
Ready-mix concrete
The prices for ready mix concrete were volatile in the latter half of 2020. But experts are seeing an increase in prices by as much as 0.3 percent in February this year. Anyhow, the prices have decreased in the South and Midwest parts of the company. But the case is different for the Northeast and west, where the PPI has increased by 1.4%.
Know your Challenges
With construction materials getting pricier, homebuilders are facing problems finding materials at a reasonable price. It is challenging for contractors to cope with the sky-high buyer demand despite the rising home prices and climbing mortgage rates.
With a shortage of materials, equipment or parts, COVID-19 has caused delays in construction projects apart from the supply chain disruption. The manufacturing and distribution of building materials have seen a major setback due to lockdowns and the shutting of production units. That, in turn, has increased the rates of the construction materials, and contractors are finding it hard to follow their construction schedules.
Surviving the challenges and your way out to stay strong
Now that you’re through with the surge in numbers of all material prices, it’s time to make a move and shift gears to cope with the situation. You know the challenges, and this will help you in making a workable plan against all odds.
The equation is simple yet challenging. It would help if you managed your direct and indirect costs to stay profitable and avoid cutback to profit margins. Here’s what we believe will be a definite help for you as a contractor:
Try to compare the material prices of different shops to secure savings and shop at once for all components instead of sending your workers to the nearest retail hardware store. You can compare the prices of online stores and can find stores offering wholesale rates. Buying in bulk will further help you in getting discounts. Though these discounts might look small, these small cost savings will be big savings for a large project.
Manage your site properly to reduce wasted time and project delays. You can make teams and delegate tasks to enhance efficiency at the site. Try to hire competent and trusted project managers to help you creating project goals and meeting deadlines.
Your team is an asset, so try to engage the right workers that stay with you, even during hard times. Follow a workable hiring plan for labor and subcontractors. Check for their license and their past work.
Avoid cost planning errors in estimates. Try to hire a construction takeoff and estimating company that would help you allocate the proper budget for all the tasks and reduce your expenses in the long run.
Use quality tools and equipment to expedite progress. Know the scope of work and evaluate your project requirements before hiring equipment or buying tools.
Try to promote good construction practices and avoid construction waste. That will help you in saving money and improve the site efficiency.
You can use the above simple steps to reduce construction costs. Lowering the amount you spend on building materials, reducing labor costs, and cutting down your running expenditure would ultimately help to improve your bottom line, and that will make your business more profitable.
Need to go out of the box? Hire us Now!
Do you want to be specific and accurate in your job estimates? Do you want to avoid underestimating and cost overruns? With the surge of projects in the market, you can turn the table in your favor by hiring a construction estimating and Takeoff Company to win more projects and help you avoid major setbacks amid the global pandemic.
A reputable and experienced company would not only help you win more jobs, but they can also guide you about managing on-site costs and reducing construction wastes. So, you never have to spend your precious time preparing bids when you can value your time on some important tasks and managing businesses.
That’s where we bring in our collective experience of over 40 years in construction takeoffs and estimating. We’re a team of project managers and engineers helping contractors and builders win more jobs and take their business to the next level of success.
Hire us today, and enjoy a fast turnaround and high-quality takeoff results.
How to Do a Construction Estimate-Step by Step Guide
Construction activities are complicated, unique in nature, and are labor-intensive. By the same token, their estimate is also a bit complex and requires more prep work. Determining the cost estimate requires you to consider several factors including market dynamics. However, your survival as a construction business lies heavily with the accuracy of your estimates and quotes. They’ll exclusively decide whether you’re going to win or lose a profit.
Doing your estimate from scratch is a whole lot of work especially when you’re after accuracy. If you aim too high the bid will go to someone else but bidding too low will cost you the profit margin. So, what’s the solution?
Well, the solution is not simple or easily achievable. You just have to balance both the upper and lower limits. You need to bid low enough to compete with other companies offering the services and high enough to include labor, material, equipment, and indirect costs of doing business – plus profit margins.
Want to know more? Don’t worry; we’ve made this handy guide about how to do a construction estimate so you can convert bids and win more projects.
How to do a construction bid?
Whether it’s your first time bidding on a construction project or if you’ve done that several times before; learning the tools and tricks will help you to make accurate construction estimates.
Step No. 1 – Review the Project Scope and Specifics
Where to start? Well, if you’ve already found the right work to bid on; you can start by reviewing the project scope.
At this stage, you have to be pretty sure about the project scope and the client’s objective of undertaking the project. You need to figure out what type of services you have to offer, what costs will be involved in completing the tasks, what’s the completion date, and what are the client’s expectations. In many cases when the client doesn’t know about their requirements, you have to ask questions about the scope, cost, services needed, and expectations from the project.
After knowing all the basics and project specifics, the next step is to jump to the actual part – the construction estimate. You will take off quantities after reviewing construction drawings and specifications. You have to be sure about the steps involved and the things require. Add every piece of fixture and material you need along with the labor you’re going to hire. The best way is to break down each milestone of a project into individual items.
Many large-scale construction projects have specifications and contract documents. They include all the contractual requirements you have to meet while executing activities at the site. So, you must review them all and no special requirements that may be costly to undertake. For projects that don’t have a well-defined scope, you need to be pretty sure to have an agreement with the client. You can ask your client about their interpretation of the project and the scope of work. Jot down all the information at hand and comply with it while preparing the cost estimate.
Step No. 2 – Workout a project timeline and deadlines for milestones
After that you’re all set and familiar with the project scope, deliverables, and specifics; now is the time to work out a project timeline. In most cases, the client will ask you about the approximate timeframe it’d take for the completion of the job.
The best way forward is to set forth project milestones and breakdown each section of work into activities and depending on your best assessment and experience give each activity some duration. Don’t forget to take into consideration the activity related to going through parallel activities at the same instant. Anyhow, you have to be pretty sure about your schedule and similarly have to be clear with the client in terms of any uncertain and possible factors that could delay your project.
Step No. 3 – Identify the works you need to sublet
Whether you’re looking to undertake a megaproject or your client asks for early completion of works than a normal schedule; you may have to sublet a portion of your work to meet the deadlines.
Subcontractors will offer some extra hands on a large project and it is a cost-effective way to bring them on instead of burning out.
So whatever the scenario is, you have to price out subcontractors and factor them in your estimate.
Step No. 4 – Estimate and Takeoff Material Quantities
Measure Quantities using Digital Software
For estimating quantities and calculating areas or volume, you can either go with manual calculation or if you are aiming for a large-scale project you can go with digital takeoff software. Programs like PlanSwfit, Bluebeam, Stack, and ProEst are handy in such scenarios.
Manual hand measurements are tedious and there’s always a chance of error. In contrast, estimating software streamlines and automates the takeoff process. You can embed and import project drawings and after setting the scale; you can estimate the quantity regardless of how complex the shapes are. Due to such reasons, a lot of construction companies and businesses are transiting from hand measurements to digital takeoff software.
Different Methods of Construction Estimates
One of the most common methods of estimating in construction is; unit rates. Depending on the type of material or resources, you can determine the amount based on the market scenario and your profit to undertake unit quantity like the per piece, meter, kg, etc. Now that you have a unit price you can just multiply the estimated quantity with the unit price to prepare a cost estimate. Many planning engineers try to establish a work breakdown structure of each section of work and assign resources to establish a cost estimate.
Add a percentage for Waste
While estimating the cost of the material you have to be realistic in terms of allowance for waste in construction materials. No matter how effective measures you take during construction to minimize waste, it is not completely avoidable. While dealing with wooden sections, you need to produce custom sized designs that require cutting. Similarly, some amount is wasted while moving materials around the site or during storing.
For waste allowance, you can consult exact material waste rates for different jobs and materials. Like for brickwork, standard practice is to allow for 20% wastage while for the good practice you can lower it to 10%. Similarly, for the concrete block, you can add 5 to 10% wastage. So, make sure you add wastages in your materials to avoid potential problems. Try to keep a record of your actual waste versus estimated wastes to formulate a site waste management plan and save money in the long run.
Step No. 5 Determining labor and material costs
The unit rate method is most accurate of all but it is time taking and has to be detailed. Another method is the square footage method. It involves calculating the cost of construction by multiplying the square footage or covered area of the structure by the cost per square footage rate established by experience. This method is used only for rough cost estimates of building or structure and is not an accurate way.
Apart from the material cost that you can determine based on the above methods, the other share of cost is for the labor cost which accounts for about 40 to 50 %. The cost of labor depends on a host of factors including the type of construction activity, complexity or nature, required expertise and experience, and the area of construction. You can enlist the type and amount of labor required and multiply the same with unit hourly rates.
Heavy Equipment Costs
Detailed cost estimates must include the cost of heavy specialized equipment that goes directly under the head of direct costs just like material and labor. So, try to prepare a list of various types of construction equipment needed for each phase. There are two portions of the equipment costs that you have to consider. The first portion, which is the bigger portion, encompasses the cost of acquiring and operating the equipment during the construction process. While the second one, the smaller portion, is for the hand tools you may have to use.
You have to estimate the equipment costs separately for general use items and specialized used items. General used items are shared by all subcontractors at the site and they are like forklifts, pumps, cranes, and air compressors. Specialized items include tractors, scrapers, shovels, loaders, and backhoes. If you already have the equipment you just have to include operation, depreciation, taxes, and insurance costs. But if you want to own new equipment it will include initial financing costs as well. Operating and repair costs include storage, fuel, and lubrication costs.
You can determine whether you need to hire equipment on rent or buy a new one depending on the frequency of its usage. In the case of renting equipment, you can include its rental costs in the estimate.
Step No. 6 – Compare your costs with that of your competitors
When you’re in construction business, you can learn a lot from competitors. Researching and knowing about your competition is a crucial step in living through it. So, make sure you know how much competitors are charging for similar projects.
The best way of dealing with such is to neither price too high nor too low. You can consult their website for the costs of their services or you can join a trade union to have a measure at their capabilities. By doing competitor analysis in construction bidding you can uncover hidden weaknesses and threats while maximizing your opportunities in winning a bid.
Step No. 7 – Incorporate contingencies and uncertainties in your estimate
One of the crucial phases of construction estimating is incorporating contingencies and their impacts. It is no doubt that construction activities are uncertain and involve risky maneuvers. Contingencies in estimation are the addition of an amount to the estimate to allow for items, conditions, or events such that their impact or effect is uncertain.
You need to go through detailed risk analysis of all activities in a project and add associated costs into the estimate. There may be situations like design or scope change or there can be days lost to wet weather for construction. The labor can go sick or you may have to strain the labor with training sessions. All such things factor in the estimate to avoid major setbacks during project execution.
Step No. 8 – Include Profit Margins
Your profit margin is the amount left over after paying for a project’s cost and overhead. This percentage has to be properly assessed so that you can make money while staying competitive. You can use this money to reward your employees or you can reinvest into business growth or you can even save some as a safety cushion for future losses.
Setting a profit margin is a little bit of a trial and error procedure. When you’re new and fresh you need to find a minimum point where you can win a project. Once you’re there with a win you can marginally increase the amount and grow in the process.
Let’s say your estimate for a project is $900 that includes $600 for labor, $240 for material, and $60 for overhead. So if you assume a profit of $100 you get an overhead markup of 11.11 percent. You can add this percentage to your project estimate to incorporate profit.
Step No. 9 – Project Exclusions & Inclusions
Your bid and estimate have to be specific in terms of the services you’re going to offer and also the exclusions. Use the same language as that of the specifications and drawings to make it easier to understand for the general contractor. Such a list of inclusion and exclusion will not only avoid confusion but will also avoid conflict in the future.
This list will further help you in reviewing if all the important things have been covered out of the scope and nothing major is missing. In the case of lump sum bid offers, this list is crucial and is the only way to provide detailed break-out systematically.
Step No. 10 – Take expert insights where you feel lost
If you’re a newbie or it’s your first time dealing with a specific type of project, never hesitate to take expert insight. You can take help from subcontractors or consultants to avoid cost overruns. You can also outsource construction takeoff services that have hands-on experience in preparing a bid that converts.
In contrast, when you’ve experienced you already know how to determine project risks and reduce costs accordingly by assessing the project site and nature of work. So, try to look at all the aspects of the project and details. Look into your insurance coverage closely and make sure the emergency funds are there to tackle the risks and damages.
Step No. 11 – Now it’s the time to submit your bid
While you’re bidding as a subcontractor, make sure the GC asking for the estimate/bid was awarded the job or otherwise. Your bid has to be impressive and preparing winning bids is not too hard. Try to prepare a bid document template for your company so you can easily insert details of the project and timely submit the estimate.
Step No. 12– Follow up
Staying in touch with the client after bidding can be handy at times. You can dramatically increase your close rate by proactively following up after the submission of the bid document. However, allow a gap of three to five business days to the client so they can review your submitted bid.
Multi-Family and Apartment Takeoffs Services As the demand for rental homes increases, contractors in the apartment construction industry are facing a surge in new project opportunities. However, accurately estimating the cost of building an apartment complex can be...
Best Commercial Paint Sprayer-Professional Review Being a commercial painting contractor, it is crucial to pick the best commercial paint sprayer for the job. While working on large painting jobs that require the application of paint to surfaces...
Building Material Price Guide 2021 – Lumber Prices – Rising Prices As we progress through extraordinary times, contractors are getting complaints from their clients about the overall increased prices of construction projects. In...
When you’re into a construction project you need to convey the design data efficiently to the construction crew so that the information and design intent is followed in the true sense.
Set of drawings, whether construction or shop, is the tool field staff use to communicate the technical details in a format that’s widely understood. These drawings are important throughout the entire life cycle of a project from the tendering to commencement through to the handing over.
If you’ve been around construction projects you must know how complicated the construction projects can be. In such cases, the drawings are the only moving parts that will make sure the finished product comes out as planned.
Building projects don’t rely on guesses or assumptions, it is critical to have an accurate and detailed set of drawings before jumping in the field.
However, there’re many types of drawings depending on the project you’re working with. But two of the most common ones are shop drawings and construction drawings. The contractor has to take into account all these set of drawings into consideration before commencing the work.
As a contractor, you’re provided with construction drawings only and you’re assumed to prepare detailed shop drawings to elaborate detailed design and submit the same to the client for approval before the construction gets underway.
What it is and why contractors need it?
Set of construction drawings is a way to provide project design requirements to contractors. They’re prepared during the design phase and include all the specifications and architectural designs.
All the decisions made pertaining to the design of the building project have to go in there. They’re like the lifeline for any construction project. Any mistake or a shortcoming in the drawing can be corrected before the construction gets underway in the form of a new revision.
On the other hand, shop drawings delve deeper into the components or the parts of the project. Whether you’re a contractor or a material supplier you have to take the plunge of such hefty work.
You need to show actual dimensions and elevations rather than typical design details and follow the same design intent as construction drawings.
You need to collaborate and show all the MEP components. Likewise, you need to follow the construction methodology to confirm if the design can be followed in a true sense or some modification is required.
In the latter case, you have to get some approved design change requests. Anyhow, you can’t proceed with the construction of a component unless you’ve got an approved shop drawing. In a nutshell, that’s a whole lot of work.
What details have to go in there?
Professional construction shop drawing services offer in-depth details of fixtures and finishes. They included but are not limited to floor and wall tiling, kitchen countertops, cabinets, millwork, stone, concrete work, backsplash, and stairs.
Contractors have to show their interpretation of the construction documents with quality shop drawings, details, and documents as per the requirements of the design.
The benefits of preparing such shop drawings are multifold. When you’ve got accurate design details and the types of material required, the material ordering, take-offs, fabrication, and installation can go smoothly.
On the same lines, there are reduced chances of mistakes at the site during execution of the design through to the verification of material schedule and preparation of interim payment certificates. Even if you find some duplication or an error at this stage you can make corrections before even disturbing the ground.
Being a busy contractor with a tiring schedule, you can’t waste your time tracking shop drawings and their revisions. With so many deadlines to manage and technical issues to resolve, the best way forward is to go with the shop drawing services.
Outsourcing such services from a reputable firm will not only ease off your considerable burden but will also let you focus on core issues. So, call us now at 404-900-9811, and let’s discuss further. We can help you with countertop shop drawings, kitchen cabinets shop drawings, mill workshop drawings, masonry shop drawings, and concrete shop drawings.
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Looking to embark on a construction cost estimate but are worried about the financial impact of cost overruns? It is no doubt that accurate construction costs estimate is crucial for the success of a project, no matter what. Whether you’re an employer who’s looking to undertake new construction or you’re a construction firm looking to multiply profit margins; you need accuracy in estimates.
Technically speaking, contractors use a construction cost estimate during the tendering stage to bid on a project. Clients, on the other hand, takes input from architects and engineers to forecast the cost of a future project. Clients use these estimates to allocate a budget for the project and to see if the project is feasible or not.
Understanding the basics of construction cost estimating is crucial and it will help you in understanding the ways and tricks of gaining favors on your side. An accurate estimate will let you forecast how much a project will cost and how long it will take.
When you’re a project manager, dealing with the cost and budget is the whole ball game. Through earned value management and good cost estimate, you will neither lose money on the project nor do you charge more from the client. This will let you stand out among competitors, earn more clients, and enjoy their admiration.
Hence, a construction cost estimate can make your project an overnight success or it can ruin your entire investment. But the best part is, it’s all in your hands; manage it and enjoy benefits, ignore it, and face consequences.
However, the bad part is that establishing a construction cost estimate seems daunting, especially if you’re a newbie in the field. Anyhow, don’t worry because today’s read describes the methodology for performing a construction cost estimate the right way.
We’ll start from the basics definition of terms commonly referred to in construction cost estimate and then we’ll discuss what some methods are for flawless and dead-accurate estimates.
Construction Cost Estimate – What is it?
A contractor uses information from the construction drawings and specifications to determine the resources (labor and equipment) and material required to complete the job. This estimate is referred to as a construction cost estimate. Let’s now explore some of the common terms used in this field.
Order of Magnitude (OOM)
During the preliminary and planning phase of a project, you don’t have detailed designs and blueprints to make accurate detailed estimates. At this stage, you can only use rough guesses, historical project data, and your experience to make rough estimates called order of magnitude.
This estimate uses historical project data with analogous mathematics. It just shows you the level of effort and cost required to complete a project. It helps decision-makers to decide whether the project is feasible or not.
Schematic design
It is the first phase of the project design that helps to establish project requirements and cost benchmark. The architect and the engineer establish rough drawings, illustrative sketches, computer renderings, and plans for the project as per detailed requirements laid out by the client. These drawings are referred to as schematic design.
Takeoff
Takeoff is to determine each of the required materials off of the blueprint for a project. The simplicity of the complexity of the takeoff depends on the nature of the project. The word “taking off” explains it is the extracting of material and the quantity required.
Bill of Quantities
After detailed construction drawings have been prepared by the architect and the engineer, the estimator formulates a document explicitly defining the materials, labors, and their cost. It defines the scope of the entire project and each of the activities to be undertaken by the contractor hired. It’s a communication document and is always a part of the contract signed by all stakeholders of the project.
Bid
A bid is a proposal or offer made by the contractor to undertake or manage the project. It indicates the price offered to correspond to the entire project scope of work.
Uniformat System
It’s a system that has been developed in consensus between industry and government departments that allows you to classify building specifications, and cost estimating. This system provides a consistent platform for the economic evaluation of building projects.
Quote
When you’re outsourcing a material or hiring someone to offer services, you ask them about the cost. In construction, a quote is just a priced summary of the work or the material to be delivered. The quote from different suppliers or service providers allows you to hire the best offer.
Squaring
As the term suggests, squaring is to determine the areas and volumes of a component or a building. The square area method of estimating is one of the quickest and easiest methods of determining the rough cost estimate of a building.
Abstracting
Abstracting is to summarize the quantities estimated and put all costs in proper heading to get the aggregate cost of everything. Here you just show footage or cubage of the quantity and cost but no detail of quantities item wise is provided.
Stick Estimating
It’s one of the most popular methods of estimating among contractors. It’s a straight forward method for simple projects but can be daunting for complex projects. You just make a list of materials needed, labor, vendor proposals, costs, profits, and everything.
Direct Costs
For construction projects, the costs for raw material, labor, equipment, etc. that are directly incurred or allocable to finish a job is a direct cost.
Indirect Costs
Indirect costs won’t have a direct link with the activity to be undertaken and most importantly; they are unaccountable costs like security costs, facility costs, administration costs, etc.
Elements of Creating a Construction Project Estimate
Now that you’re through to some of the basic terms of the construction cost estimates, let’s discuss what we have to include in the construction cost estimate. Please be noted that the below points are some of the very basics of the costs to include and it varies with the project type and scope.
Equipment
You need equipment to undertake some specified job that you can either purchase it or hire it over rent. Like if you go with earthwork, you need heavy-duty excavators so all such equipment costs have to be included. If you own the equipment you can add depreciation costs but if you hire you can include cycle times and equipment capacity.
Quantity takeoff
An accurate quantity takeoff is vital for a construction cost estimate. You need to consult the design drawings and specifications to identify and take note of all the materials needed for the project. Save & Exit
Material cost
After you’ve got the quantities of materials; you have to determine the material cost. You can buy material from the local market and you may also need to import from some other countries. Material cost is highly unpredictable and you also have to include the transportation cost.
Labor
Depending on the project scope and the deliverables you can estimate the labor hours. You must include the basic wage and benefits of the labor rates. Taxes and overtime must go in there along with the labor work hours.
Subcontractor’s Costs
If you’ve got some specialized tasks or jobs; you need to hire a subcontractor for it. Take quotes from them and include them in your cost estimate.
Indirect Costs
Besides undertaking the actual job, you need to establish residential facilities, transport, recreation, and security. All such costs are indirect costs and have to be included in the estimated costs.
Levels of Construction cost estimates
Depending on the accuracy and availability of project information there are 5 levels of construction costs estimates in line with the different stages of project execution. It is right in doing so, as the project progresses in various phases from the preliminary planning phase, design phase, execution phase, and completion phase. In this classification, the first level is the least accurate and the last level is the most accurate.
Level 1: The Order of Magnitude
It is made during the planning phase of the project to determine the feasibility of the project. It is accessed keeping in view the experienced guesses and past projects.
Level 2: Intermediate Estimate
After the finalization of the general concept, an intermediate estimate is developed to determine and allocate budget for the project, only if it’s feasible.
Level 3: Preliminary Estimate
After the scope of work has been decided, a preliminary estimate is made to see if the project budget is enough for basic financing.
Level 4: Substantive Estimate
After the finalization of detailed construction drawings and design, the unit cost estimate is made called a substantive estimate. This estimate is also used to control project costs.
Level 5: Definitive Estimate
This is the most accurate estimate made when all the project documents are well-established and all costs are known. It is the estimate upon which the bid is offered and tendering takes place.
Creating Construction Cost Estimates
Gone are the days when construction cost estimating was done by hand. You can’t afford to make errors and waste valuable time. Construction professionals and estimators are now migrating to construction management software and takeoff applications like Planswift. They have considerably reduced their mistakes and have improved cost estimates.
Recently, BIM has emerged as a useful and versatile approach in estimating the cost of a project and accessing the project behavior way before the construction commences.
We Can Help
We hope you found this guide helpful in understanding how to estimate construction costs. If you are considering outsourcing your takeoff work, we can help you. We have an experienced large team of estimators that are ready to serve you.
We use the latest technology, strict quality control process, and top-notch experience to deliver high-quality takeoffs and cost estimating results. Give us a call today to learn more at 404-900-9811.
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Other factors that can impact regional differences in cost include the cost of materials, labor, and local market conditions.
