What Are Soft Costs In Construction?

By Author: David Mills
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When planning a construction project, most people think about the hard costs: the materials, labor, and equipment that will be used to build the project. However, there are also a number of soft costs that need to be considered. Soft costs are indirect costs that are incurred in the planning, permitting, and management of a construction project.

Types of Soft Costs

Some of the most common types of soft costs include:

Architectural and engineering fees: These fees cover the cost of designing the project and preparing the necessary drawings and specifications.
Permiting and legal fees: These fees cover the cost of obtaining the necessary permits and approvals from government agencies, as well as the cost of legal services.
Financing costs: These fees cover the cost of obtaining financing for the project, such as interest payments and closing costs.
Insurance: This includes the cost of property insurance, liability insurance, and builder's risk insurance.
Project management fees: These fees cover the cost of managing the project, such as scheduling, budgeting, and coordinating with vendors.
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... Other pre- and post-construction expenses: These may include costs such as surveying, environmental testing, marketing, and leasing.
How to Estimate Soft Costs

The best way to estimate soft costs is to get quotes from multiple vendors. You should also consider the size and complexity of the project, as well as the location of the project. It is a good idea to build a contingency into your budget to cover any unexpected soft costs. You can also outsource construction estimating services in nyc

Tips for Managing Soft Costs

There are a few things you can do to manage soft costs:

Start planning early. The earlier you start planning, the more time you will have to shop around for the best deals and to negotiate with vendors.
Be clear about your project goals. The more clear you are about what you want to achieve with your project, the easier it will be to manage your soft costs.
Choose the right team. The team you choose to work with will have a big impact on your soft costs. Make sure you choose a team that has experience managing soft costs and that understands your project goals.
Stay organized. It is important to stay organized throughout the construction process. This will help you to track your soft costs and to make sure that you are not overspending.
Monitor your budget closely. It is important to monitor your budget closely throughout the construction process. This will help you to identify any potential problems early on and to take corrective action.
Conclusion

Soft costs can be a significant part of the overall cost of a construction project. By understanding soft costs and how to estimate and manage them, you can help ensure that your project stays on budget and on track.