Blog - Providing Insight into Residential Architecture and Construction

Methods of Estimating Project Cost

Calculating Analyzing Construction Data NJ ArchitectThere are three methods of calculating construction cost: per square foot, per assembly, and per unit. Parameters, such as the type of project (new construction verse renovation), the desired specificity of a breakdown, and your current place in the design process, will dictate which method of calculation to employ. As we mentioned in our previous piece, an Architect’s services may be rendered to produce a cost estimation breakdown. Having this knowledge during the bidding process will allow the homeowner to avoid outrageously low bidders (which should raise a red flag!), as well as steer clear of overpriced bidders.

Cost per square foot:

This method is best used prior to commencing schematic design of new construction or a significant addition. The estimate is determined by several factors including, but not limited to: number of stories, building configuration (detached, row house, semi-detached), exterior wall construction, desired size of living area.

Calculating cost per square foot helps keep large scale design decisions within the homeowner’s budget. For instance, comparing the financial impacts of adding a fourth bedroom vs. an additional half bath, will allow major programmatic elements to be established at the beginning of the design phase.

The homeowner’s design expectation for finished quality is, arguably, the driving factor in determining cost per square foot. Building classes range from economy (a standard rectangular home with no distinct architectural features) to luxury (a personalized architectural design with exceptional craftsmanship). And, depending upon a homeowner’s expectations, workmanship, quality of materials, and complexity of formal architectural moves will greatly vary, and in turn, affect the cost per square foot.

It is interesting to note that, no matter the building class, as the project’s square footage increases, with all other factors remaining equal, the cost per square foot will decrease due to economies of scale.

Cost per assembly:

If the project scope includes an average size addition or renovation, construction cost should be calculated per assembly. An “assembly” or “system” is a group of items which makes a single building component. Assembly costs include all associated materials, and well as the labor of all tradespeople involved.

Because costs are organized per square foot or linear foot, the assembly method provides a very accurate way to estimate project cost. If the project scope includes adding a few interior partitions, the cost per assembly method allows one to multiply the total linear ft desired with its respective assembly cost.

Cost per assemblies become more complicated depending upon the building component. For example, if a project scope includes a new roof over an addition, the cost per roof assembly would include all associated roofing materials (roof rafters, ceiling joists, sheathing, furring strips, insulation, waterproofing, roof finishing material, etc), but will also take into account the design. The more intricate a roof design (think about a mansard roof compared with a simple truss roof), the more expensive the installation cost.

Cost per unit:

Cost per unit, if done properly, is the most accurate cost estimation method because it further itemizes cost per assembly. Rather than using an average cost of all materials in an assembly, the cost per unit method calculates the exact square footage or linear footage of each building element separately (think linear feet of gypsum tape, or exact number of masonry ties or amount of caulk).

This method requires painstaking attention to detail and a vast amount of data which can only be obtained after the project is completely designed. Because of its time consuming nature, this method should only be utilized for very small projects that simply require new finish materials.

When calculated correctly, the per square foot, per assembly, and per unit cost methods will yield an accurate project estimate that can guide the homeowner when selecting a contractor. Other costs, such as demolition, clean up, permit costs, equipment rentals, etc. should be included in the overall construction cost estimate. We recommend setting aside an additional ten percent of the total estimate as a contingency cost for any unforeseen conditions that may require change in construction/design services.

Please feel free to add thoughts in the comment section below!