How Do You Calculate the Costs to Build a New House?
The first step to calculating the cost of building a house is to create an estimated cost breakdown. This breakdown includes hard costs such as labor and materials and soft costs such as permits, utilities, taxes and more.
Hard costs include building the foundation of the house, as well as hiring the professionals in charge of lumber, framing, plumbing, heating, painting and electrical installation. Material costs vary depending on preference and location of the build, so knowing as many details as possible before you build makes the estimate more accurate. Labor costs vary depending upon the expertise needed to install materials.
Soft costs are trickier to estimate because each state or county differs in permit, tax and utility costs. Researching laws and building codes at a local library will create a better understanding of what to budget for in soft costs. In general, soft costs should add at least an additional 50 percent of the hard costs to the budget.
Another cost to consider when creating the estimate is whether or not to hire a contractor. A contractor makes the process easier, because he or she has to create a plan and a time frame for building the home. The cost of a contractor varies depending on the size of the home and the cost of labor.