All There Is To Know About Construction Hard Costs

Aug 26, 2022Construction Industry, Construction News

One of the challenges faced by various construction companies is creating a budget is an accurate budget forecast. Of course, there are a number of variables that need to be considered such as market and labor costs. In order to create a realistic budget, it is important for construction companies to determine the construction hard costs. Putting together a budget can be complicated enough, but, having a clear grasp of what hard costs are is the first step. 


What Are Construction Hard Costs?

Generally,  construction hard costs are often referred to as “brick-and-mortar costs” which are directly related to the construction of a project in the real estate industry including the structure, construction site, and landscape. Also, it usually composes 70% of the total construction cost and in terms of budgeting, hard costs are easier to estimate since they’re tangible and revolve around labor and materials. Examples of hard costs are raw materials and direct labor, which result in the construction of a building and increase the percentage of completion of a project. 


Typically, in a building site, construction hard costs include all utilities underground, water systems, sewer, drain, fire, and grading, to name a few. In terms of landscape, these costs are based on the architectural drawings and include retaining walls and similar structures, grass, trees, mulch, shrubs, fertilizer, flowers, sprinkler systems, exterior artwork if needed, etc.


Components of Construction Hard Costs

Construction Hard Costs

As mentioned, construction hard costs are tangible and quantifiable. It may vary depending on project specifications and changing economic factors which can make estimating hard costs more difficult. Usually, hard costs in a construction project include the following.


Building structure


In this category, all labor and material required to complete the whole building or structure are included. It is composed of utilities, including water and gas, drains, and piping, as well as site improvement activities, such as grading or paving. 




In every construction project, contingency costs are important. It is a reserved amount of money covering all estimated unforeseen conditions and circumstances that may incur expenses. This category compromises 5-10 percent of the total project costs for new projects. Meanwhile, for remodeling projects, it may take between 10 and 20 percent. 




For landscaping projects, hard costs include grass, lawns, trees, mulch, shrubs, and fertilizer. Aside from that, any improvements, such as walkways or benches and every other material included in the construction of the projects based on the architectural designs are included.




Overhead costs are general costs that help enable the project It ranges from renting restroom facilities for workers to temporarily waterproofing the building for winter. It covers costs that are related to the business such as staff, management, temp facilities, utilities, tools and safety, and security costs. Also, the permits and insurance costs fall under this category. 


Change Orders


Most of the time, change orders lead to the overbudget of construction hard costs. Regardless, it also includes all additional expenses related to the construction of the project. It offers both owners and contractors the flexibility to address the unexpected. 


Estimation Mistakes To Be Aware Of


Despite being tangible and quantifiable, it is inevitable to encounter mistakes when estimating construction hard costs. One of the most common errors is the underestimation of the project’s timetable in terms of completion which leads to scheduling delays and increased costs. It is important to understand the current market conditions of supply and demand, the anticipation of unknown elements, and labor costs. 


There are instances where some items are overlooked such as dewatering of sites, temporary shoring, temporary protection and security, LEED testing, mockups, etc, which affects the numbers regarding the cost of materials, labor, and scheduling. As such, it is crucial for the estimator to review the information received and come up with a definitive hard cost estimate. 


In addition, some people overlook the importance of contingencies. Remember, every construction project comes with risks. Therefore, failing to assess risks and build contingencies to your estimate will be detrimental when things go wrong. In order to avoid this mistake, it’s critical to pay close attention to risk assessment and management

In A Nutshell

When estimating the construction hard costs, understand that ​​they can typically account for roughly 60 to 75 percent of a total construction budget. Be sure to make a list of all the materials and equipment required for the construction projects as per the rate in the area. When complete plans, specifications, contracts, and special provisions are submitted by the owner, hard costs can be fully developed.

United Hoist has been excellent to work with from the initial pricing phase throughout on site operation.  They have met all the dates needed on site to erect the hoist and have continued to service as scheduled/needed.  Our estimating, management and field staff have been pleased with United Hoist on our projects.

Heath M.

Vice President

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