Step-by-Step Guide to Construction Cost: Calculations and Techniques

When it comes to construction projects, project planning is a crucial step that can often take more time than the actual construction itself. One of the key components of project planning is accurately estimating the cost of building materials. This involves calculating the quantity and cost of materials required for the project, which can be a daunting task for many. However, with the right strategies and techniques, you can streamline the process and ensure an accurate estimate. In this comprehensive guide, we will provide you with tips and tricks for construction cost estimation, helping you to effectively plan and budget for your next project. The top 4 construction calculations and the most effective methods for calculating them.

1. Construction Labor Costs
2. Construction Material Costs
3. Project Overhead
4. Construction Cost Per Square Foot

Calculating labor costs in residential construction can be tricky, especially if you hire subcontractors rather than having labor on the payroll. Here are some easy ways to estimate labor costs in India’s real estate business:

• Review Past Projects: After each project, check how accurate your labor cost estimates were. Use this info for future projects.
• Get Quotes from Subcontractors: Ask for bids from 2-3 reliable subcontractors. If their rates vary a lot, take the average or go with the one you prefer.
• Check Employment Portals: Look at job listings sites like ‘Sulekha.com’ ‘Dynamic Staffing Services’ or ‘Apna’ to check expectated wages of labourers in your area.
• Use Government Data: Refer to salary data from sources like the Ministry of Skill Development and Entrepreneurship for national, state, and regional labor costs.

• Use Online Tools: There are various online tools like ‘Brick & Bolt’, ‘livingbox.in’ where you can calculate estimated cost of a project based on the factors like area, floors, location etc.
• Leverage an ERP Software: A top-notch ERP system can automatically estimate the costs for the next phase of a project based on the expenses from the previous phase.

Overhead costs are the fixed expenses you have to pay even when you don’t have any active projects. Your profit is what remains after you deduct both overhead and construction costs from your total revenue. This is your pre-tax profit. Here are some common overhead costs:

• Office space
• Insurance
• Legal fees
• Payroll
• Office supplies
• Utilities
• Accounting expenses
• Your salary

To calculate the price per square foot for new house construction, divide the total costs by the total square footage of the final structure. Alternatively, you can use online portals like Today Price Rates to obtain a rough estimate of construction costs. Simply select options such as state, city, and construction area to easily determine the construction cost per square foot.

• There are agencies that provide construction estimating service. Approach them for more precise estimation.
• Several portable calculators, like the Construction Master Pro, are specifically designed for construction math. You can buy it from e-commerce stores.
• A good construction management software also works as construction cost estimating software. Software like ‘Build Formula’ is one such sought after software in the construction industry.
• The traditional way of calculating costs on excel or google sheets is always there. It’s a bit lenghthy process, but many builders still use this estimating process.
• Monitor material prices regularly through industry reports and supplier updates to ensure accurate construction cost estimation and avoid budget overruns.