HOME CONSTRUCTION BUDGET

Home Construction Budget
Preparation of home construction budget is a tedious job. There are lots of item of works are to consider during budget making. Budget is not a constant entity. It keeps on changing during the construction phase. A precise budget depends on good skill and experience of the person making it. In most cases it has been seen that cost of building overruns the budget. This is because when the budget was framed, many items of work were not considered or overlooked. Practically, construction site is a eventful place. Unexpected events happen here occasionally. There are so many of unforeseen tasks or events which may come across during the execution process.

So, during preparation of home construction budget one has to visualize the all possible aspects minutely which may occur during the construction phase and include the cost in the budget. Secondly, the timeline. It is a great factor, if the timeline is increased the budget also increase due to increase in labour and material cost. Thirdly, mistakes and bad workmanship which may hit the budget badly if rework is to do.So, home construction budget not only depend on precise planning but also on good monitoring of construction work.

Home Construction Budget
Let us try to know the easy way to make a budget. A home construction budget basically depends on five major tasks. These are further subdivided into different parts. (see item no. 3 & 4).

1. Cost of land with legal expenses etc.
2. Cost of planning, Architect's fee and plan approval charges etc.
3. Cost of building structural work.
4. Cost of buildings' finishing work.


Home Construction Budget
5. Cost of interior works like furniture etc.

1. COST OF LAND:
The cost of land depends on shape of land, size of land, location, front road width and other facilities like nearest market,nearest hospital,nearest railway station,nearest airport,nearest bus stop and present demands of land in that particular area etc. So,one has to select the location according to their choice and budget. if choice of location is finalized then decide what size of land is required. Assume we need to construct a home of G+1 storey with total covered area of 2000 sq.ft., the minimum land area will require 2000 sq.ft. approximate ( 50% built up area + 50% open area).Now the prevailing rate in that area is, say INR 900 per sq.ft then the cost of land will be                      = INR 18,00,000
Cost of legal expenses @ 7% of land cost    = INR 1,26,000

Total Cost of land                                     = INR 19,26,000


2. COST OF PLANNING, ARCHITECT'S FEE AND PLAN APPROVAL CHARGES ETC.
The Architect's fee depends upon their popularity. A well known famous Architect's charge is always higher. But other Architects or Planners also do better and their charges are low. One can choose their Architect as per their choice but make sure that their services should be good. Many Architect delays to give drawings in time which hampers the progress of construction work. In general, Architect charges around @ INR 60.00 per sq.ft. of sanction area including plan approval charges and other charges etc. However, different Architects charges may vary as per their services. Considering INR 60.00 per sq.ft. the charges for 2000 sq.ft. it becomes INR 1,20,000.00

3. COST OF STRUCTURAL PART:
The cost of structural work and finishes are considered on percentage basis about their contribution to the total cost of construction. That percentage can be used to prepare a home construction budget for
arising an approximate expense of each item of work.

Home Construction Budget

  • Foundation work up to plinth level -------------------- 11.0%
  • Brick work ------------------------------------------------- 13.5%
  • Concrete work (R.C.C. work) --------------------------- 14.5%
  • Internal and External plastering work ------------------ 6.0%
  • Compound wall, external developments etc. ----------3.0%

4. COST OF FINISHING PART:
  • Flooring works --------------------------------------------  11.0%
  • Plumbing and sanitary works ---------------------------  11.0%
  • Electrical / HVAC works --------------------------------     7.5%
  • Internal and External painting works ------------------  10.0%
  • Doors, Windows and MS grill works etc. -------------     7.5%
  • Others miscellaneous expenses -------------------------   5.0% 
5. COST OF INTERIOR WORKS LIKE FURNITURE ETC.

The cost of furniture like beds, dining table, wardrobe, TV unit, sofa and other furnishing items etc. depends on their types and materials used. Wooden furniture costs more. However, furniture costs may vary in between INR 120.00 to INR 350.00 per sq.ft. of covered area. Here, we consider moderate types which comes around INR 150.00 approximate. Therefore the furniture cost @ INR 150.00 per sq.ft. for covered area 2000 sq.ft. is INR 3,00,000.00


Home Construction Budget

PREPARATION OF BUDGET:

Firstly, we have to collect the prevailing market rate for cost of construction in that locality. This cost includes all structural and finishing items cost together. It is easily available by asking local builders, contractors or people who recently build their own home.Generally, It is about INR 1200 to INR 1400 per sq.ft. depending upon the area. In rural area it is lower and city area it is higher. Let us consider the rate be INR 1400 per sq.ft. Now if we want to construct a home of 2000 sq.ft. built up area, the total cost of construction will be 1400 x 2000 = INR 28,00,000.

The grand total cost is ( item 1+2+3&4+5)= 19,26,000+1,20,000+28,00,000+3,00,000= INR 51,46,0.0000

So, the overall home construction budget for constructing a duplex home on a land area of 2000 sq.ft. having built up area of 2000 sq.ft. is INR 51,46,000.00

Break ups for item 3 & 4:

  • Cost of construction of foundation work up to plinth level  = 28,00,000 x 11.0% = 3,08,000
  • Cost of Brick work for complete structure                         = 28,00,000 x 13.5% = 3,78,000
  • Cost of all concreting work                                                = 28,00,000 x 14.5% = 4,06,000
  • Cost of Internal and External plastering work                     = 28,00,000 x   6.0% = 1,68,000
  • Cost of Compound wall, external developments etc.          = 28,00,000 x    3.0% =   84,000
  • Cost of Flooring works                                                       = 28,00,000 x 11.0% = 3,08,000
  • Cost of Plumbing and Sanitary works.                                = 28,00,000 x 11.0% = 3,08,000
  • Cost of Electrical / HVAC works.                                        = 28,00,000 x  7.5% = 2,10,000
  • Cost of Internal and External painting works.                      = 28,00,000 x 10.0%= 2,00,000
  • Cost of Doors, Windows and MS grill etc.                            = 28,00,000 x  7.5% = 2,10,000
  • Cost of others miscellaneous expenses.                              = 28,00,000 x  5.0% = 1,40,000

Home Construction Budget


HOW TO CONTROL THE BUDGET:

Now, we have got the budget of each items separately and it has to be controlled during construction phase from very beginning. It should be monitored regularly so that it cannot exceed their limit.
But how to do that? o.k., the above each item budget is included all labours, materials and other miscellaneous cost. 
Generally, 
Materials cost is considered about 55%
Labours cost is considered about 37%
and miscellaneous cost is about 8%

Now, bifurcate all the items by this percentage basis.Thus we will get the cost of labours, materials and other expenses separately for each item. For example, the above said G+1 duplex building's total budget is INR 51,46,000.

So, the bifurcated costs are,
Total budgeted materials cost = 51,46,000 x 55% = 28,30,300
Total budgeted labour cost     = 51,46,000 x 37% = 19,04,020
Total budgeted misc. cost       = 51,46,000 x 8%   = 4,11,680

Now, try to restrict all materials procurement cost within INR 26,88,785, all labours cost within INR18,08,819 and all misc.cost within INR 3,91,096 which are 5% less than their budgeted cost.

Another way is to complete the each items of work at 5% less than their budgeted cost as mentioned in "Break ups of items 3 & 4". This will be more precise and more monitorable.
Try to complete each item of work within 5% less from the budgeted cost of that item. And do this practice to all the items. This 5% will act as a cushion. In this way we may save some cost in some items. But some items can cross their budget limit by certain amount, so overall limit should be remain same or less than the budget. If  any item exceeds the budget then it should be verified and necessary adjustment is to be made in the budget. But target will always be to complete each item of work below 5% of their budgeted cost. In this way we can control the expenses. Thus, we can complete the project within the budget.

Hope this article may help you to make home construction budget easily.

SHARE

Green Environment

Hi, I’m Gobinda Burman (Green Environment). More than 27 years in the field of Building Construction industry, I’ve completed many high-rise building projects successfully. I have got the opportunity to learn and solve the critical practical problems related to building construction. I love to share my knowledge with those people who wants to build their own home and the budding civil engineers willing to build their career in this field..

  • Image
  • Image
  • Image
  • Image
  • Image
    Blogger Comment
    Facebook Comment

35 comments:

  1. Good description and helpful in preparing lum sum budget.

    ReplyDelete
  2. Superbly written article, if only all bloggers offered the same content as you, the internet would be a far better place.. vibro stone columns

    ReplyDelete
  3. A great content material as well as great layout. Your website deserves all of the positive feedback it’s been getting. I will be back soon for further quality contents. Custom Home Builder Vintage Oaks

    ReplyDelete
  4. What sort of values do you want from your roofing company? Do you want them to be family owned and operated so that you get a family orientated service? Do you want your Sydney roofing company to use Australian made materials? Think about these things when interviewing Sydney roofing companies. roofing companies

    ReplyDelete
  5. Hi there to everybody, it’s my first go to see of this web site; this weblog consists of awesome and in fact good stuff for visitors. Hurrah, that’s what I was exploring for, what stuff! Existing here at this blog, thanks admin of this web site. You can also visit Cheap Land Capability Assessment for more The 4 Spheres related information and knowledge.


    ReplyDelete
  6. Thanks for shared that blog with us. If anyone here searching Restaurant On Lake Conroe then visit The Shoreline Condominium.

    ReplyDelete
  7. This is one of the most incredible blogs I've read in a very long time. The amount of information in here is stunning. we provide kensington planning drawings at affordable prices. for more info visit our website.

    ReplyDelete
  8. Thanks for sharing the best information and suggestions, If you are looking for the best best way to sell house for sale by owner, then Sale By Home Owner. Highly energetic blog, I’d love to find out some additional information.

    ReplyDelete
  9. Your blog is awfully appealing. I am contented with your post. I regularly read your blog and its very helpful. If you are looking for the best Building Survey London, then visit Noor Construction Consultants Ltd. Thanks! I enjoyed this blog post.

    ReplyDelete
  10. Thanks for such a pleasant post. This post loaded with lots of useful information. Keep it up. If you are looking for the best information and suggestions related to Office Space For Rent Calgary then visit Core Commercial Real Estate.

    ReplyDelete
  11. I agree with a lot of the points you made in this article. If you are looking for the Window Replacement In Dromana, then visit JC Window and Door Replacements. I appreciate the work you have put into this and hope you continue writing on this subject.

    ReplyDelete
  12. Thank you for sharing such a Magnificent post here. I found this blog very useful for future references. keep sharing such informative blogs with us. outdoor patio installation kingswood

    ReplyDelete
  13. Extremely useful information which you have shared here about home construction. This is a great way to enhance knowledge for us, and also beneficial for us. Thank you for sharing an article like this.
    home construction company warlingham

    ReplyDelete
  14. It is a proficient article that you have shared here about Construction. I got some unique and valuable information from your article. Thankful to you for sharing this article here. Executive Construction Resumes

    ReplyDelete
  15. It is very useful to get idea about the budget of a house. As I search about the plumbing courses online from new trades career then I found your blog that looks so informative for us. And, as I need the information about plumbing all i got from one place. Please keep sharing such a valuable information with us.

    ReplyDelete
  16. It's really an excellent article which you have shared regarding roofing repair and services of commercial roofing, I always check this type of blog, and I’m impressed with Extremely useful info, I care for such information a lot. definitely recommended Peak Roofing DFW Services & Repair company in the United States.

    ReplyDelete
  17. I appreciate your efforts which you have put into this article. This post provides a good idea about construction. Genuinely, it is a useful article to increase our knowledge. Thanks for sharing such articles here.outdoor dining canopy online UK

    ReplyDelete
  18. One of the reasons why plumbing is important is that its innovations to reduce the water consumption, thus saving important resources which are used to render it hygienic and transport it, have greatly reduced the amount of water utilized by toilets, shower heads, faucets and other plumbing devices. iplumberpro.com

    ReplyDelete
  19. I liked your work and the way in which you have shared this article here about Home construction budget. It is a beneficial and helpful article for us. Thanks for sharing an article like this. pile driving

    ReplyDelete
  20. Awesome ideas in this great post. We are thinking of decorating our home with precast compound wall. It would be really helpful if a professional would help to do this.

    ReplyDelete
  21. Very awesome!!! When I seek for this I found this website at the top of all blogs in search engine. immobilienmakler mülheim an der ruhr

    ReplyDelete
  22. Interesting post. I Have Been wondering about this issue, so thanks for posting. Pretty cool post.It 's really very nice and Useful post.Thanks immobilienmakler mülheim

    ReplyDelete
  23. You have given essential data to us. It is excellent and informative for everyone. Keep posting always about Silicon Valley homes for sale. I am very thankful to you. Thanks once again for sharing it.

    ReplyDelete
  24. It is a proficient article that you have shared here about counteraction and remolding. I got some unique and valuable information from your article. Thankful to you for sharing this article here.
    Commercial Construction

    ReplyDelete
  25. I read the above article and got some knowledge from your article which is about roofing. It's actually great and useful data for us. Thanks for sharing it.
    roofing company ottawa

    ReplyDelete
  26. Im researching on construction materials and found this very cool! This will be a good reference.

    ReplyDelete
  27. Clearly, It is an engaging article for us which you have provided here about home construction. This is a great resource to enhance knowledge about it. Thank you.
    residential drafting

    ReplyDelete
  28. This is a really well presented and thorough post and has obviously been well researched. If anyone would like any information about selling real estate without agents I can provide some tips for that.

    ReplyDelete
  29. It is really great to read all the important information on residential real estate in one piece of article. Good information have been shared here for residential properties developer as well. Great post. Custom New Home Builder

    ReplyDelete
  30. You have worked nicely with your insights that makes our work easy. The information you have provided is really factual and significant for us. Keep sharing these types of articles, Thank you.residential builders auckland

    ReplyDelete
  31. I read your post and this blog is very good. You have provided good knowledge in this blog. This blog really impressed me. Thank you for sharing your knowledge with all of us. Steel buildings Canada

    ReplyDelete
  32. Hi, every day I visit a number of blog sites but I'm very happy to read your post Thanks for sharing the informative blog post about roofer in tulsa

    ReplyDelete
  33. Clearly, It is an engaging article for us which you have provided here about Office Building exterior Wall Expansion Joint Covers. This is a great resource to enhance knowledge about it. Thank you.
    Office Building exterior Wall Expansion Joint Covers

    ReplyDelete
  34. It’s actually a great and useful piece of info that you have shared here. I’m happy that you just shared this helpful info with us. Please stay us informed like this. Thank you for sharing it. Luxury home builders near me

    ReplyDelete
  35. I admire this article for the well-researched content and excellent wording. I got so involved in this material that I couldn’t stop reading. I am impressed with your work and skill. Thank you so much. Deep Cove Condos For Sale

    ReplyDelete