What Are the 5 Types of Construction Cost Estimates?

Construction is all about starting a journey of a few months for creating something new and fresh. However, it can be a roller coaster for some people who have not done anything related to construction in the past. It requires technical knowledge to understand the infrastructure, quality of material, cost estimation, labour management, measurements, etc. 

Generally, people hire professionals for the same and tend to believe that everything will be smooth. Although things get tough in the middle of the project if you do not pay heed to management, cost and time. It is extremely important to understand what construction you want to have for your project. 

Depending upon the type of construction, it will be decided what to choose and how to manage things. Whether it is a commercial building or a residential property, everything requires equal attention and if you fail to do that, things can become messy.

Estimating the cost of a construction project is not easy. Either you have to take construction professionally or increase the amount from your actual expectation as a backup. Architecture, engineering and the construction industry has different vocabulary for construction cost estimation There are different types of construction cost estimates some of them are:

Preliminary 

When you go to a professional and ask them about the total estimated cost of the project, that is the preliminary cost of estimation. The very first type of construction cost estimation is to be the presumption and a mere estimation according to experience or market rate. It depends upon the size of the project and the type of construction. 

Pros 

• Helps owners to decide their budget.
• Helps in negotiation with constructors of the project. 
• The owner can arrange the money in a certain period of time according to the estimated cost

Cons 

• Preliminary cost is not fixed and can fluctuate anytime during construction. 
• It can be a wrong estimation because the cost of materials and labour can change. 
• Can mislead the owner, by giving them wrong information. 

Detailed Estimation 

Detailed estimation is the extended version of preliminary estimation. It Involves proper estimation of a project based on measurements, budget, and other specifications. It also involves entire project planning and construction drawings for better understanding. 

Pros 

• Construction cost estimation is realistic and more accurate. 
• Helps the owner to understand the construction model better. 
• Pre Planning helps in making things smoother in future.  

Cons

• Still an approximate budget and is not fixed. 
• Majorly depends on material cost and labour. 

Quantity Cost 

It is a methodical construction cost estimation, where the cost is estimated through the material and its cost. It is generally calculated by multiplying the dimensions by the cost per unit. This helps in extracting the actual cost of the material that will be used. 

Pros 

• Helps in calculating the cost of the material. 
• Helps in budget planning. 
• Allows the owner to customize material according to budget beforehand. 

Cons

• Does not deliver the actual cost of construction. 
• Does not include other factors of construction. 

Bid Estimate

A bid estimate is the estimation of a project for commercial purposes. It is generally given as a proposal to other businesses to win the project. If your estimated cost has everything included and in the budget of the owner, you will win the project.  Thus, the 30 to 70% estimation is correct in bid estimation. 

Pros

• Gives almost correct estimation
• Rare chances of exceeding budget as compared to estimation. 

Cons 

• Generally used for commercial use only.
• Conflict of ideas can be there. 

Cost Estimation

Cost estimation can be of three different subtypes: historical, parametric, and bottom-up. This type of estimation is not dependent on realistic things, instead, they are based on estimation of similar projects handed in history or material cost estimation, or when the cost of each thing like labour, material, etc. are calculated separately. 

Pros

• Bottom-up cost estimation gives the most accurate estimation.
• Better accuracy in parametric estimation can be expected. 

Cons

• Historical cost estimation has no basis, which makes it irrelevant. 

The Bottom line 

Construction cost estimation is not easy for real projects. When it is a commercial project it gets even more difficult to estimate the project cost. Every type of estimation is based on the type of project. Estimation helps the owner to fluctuate their budget and remove budget constraints (if any). Remote Estimation is known for giving the best construction estimating services nyc.