Every industry has buzz words, jargon, and terminology that can sound foreign to those outside the industry. The construction industry and the worlds of real estate and finance each have their own language and when you are planning a build out for your business, you need to be familiar with the terms to ensure you get the best value for your build out. Let’s explore some construction budget categories to familiarize you with the language of the industry.
Bringing a seasoned professional project manager, like those at Perillo Construction, on board at the start is a great way to ensure you get the best budget estimate possible as well as the best quality materials and craftsmanship. Here’s what you need to know.
The term hard costs refers to the physical renovations required for your space. This can include everything from new walls to air conditioning units. Hard costs often make up 75 percent or more of your budget, but can also vary considerably based on the details (such as quality and finishes) of your build out project. Common hard costs items include doors, windows, framing, walls, paint, carpet, plumbing, and electrical.
The term soft costs refers to services and expenses included in the process of completing your build out successfully. Soft costs estimates do not include physical changes, and make up approximately 12 percent of your budget. Soft costs include items such as legal fees, building permits, and architectural drawing and designs. These costs typically only vary slightly based on the complexity of your build out project.
The term vendor costs references a variety of miscellaneous expenses needed during your build out. Vendor costs are estimated at less than 10 percent of your build out budget and include items like moving costs, signage for the new location, security, and cabling. These costs are dependent on the specific needs of your project, your space, and any terms negotiate din your lease agreement.
Contingency Costs (Allowance)
Contingency Costs or a Contingency Allowance is a portion of your build out budget allotted to cover unexpected expenses. Your project manager should include this in his budget estimate for your build out. If you choose not to use a project manager, a contingency allowance should still be included in your budget. Generally, this portion of the budget should be around 10 percent of your overall build out costs. For build outs in shell condition, the allowance can be lower, for those in second generation spaces, the costs may be higher.
Project Management Fees
Exactly as it sounds, the project manager fee is the fee charged by the project manager to oversee your build out. This fee can be estimated at five percent or less than your overall cost, though there is some variation dependent on the size of your build out. Though an additional costs added to your build out budget, having an experienced project manager will often save you money by helping you avoid costly mistakes and delays.
Call on the Experienced Team at Perillo Construction for your Build Out
While you are now familiar with the terminology involved in your build out, a Perillo project manager can help you develop an accurate budget for your build out and answer any questions you may have regarding your project. Reach out to Perillo Construction and find the assistance you need in developing an accurate estimate of your build out project cost. With Perillo Construction, you can count on our knowledge and expertise to ensure your successful office build out stays on time and on budget.