In the course of a project we will discuss the true costs of construction with clients. We ask that clients be as honest as they can be about their budget and expectations and we give strong guidance when those are misaligned. Many clients come to us with a cost/sqft expectation for their projects, which while a starting point is never the complete picture. When evaluating a project we prefer to look at recent historical data for our past projects and then work through a comprehensive budget that includes estimates for Architecture, Structural Engineering, Permitting, Sitework and Landscaping, Construction Costs and a healthy contingency!
Key cost items we evaluate:
1. Historical Data
2. Client imagery and design questionnaire
3. Project scope, complexity and expectations
4. Initial schematic design
5. Overall project budget
We refer to cost date from actual projects in Alaska. Cost data from outside is rarely applicable or comparable to what we see in Alaska. Alaska prices are unfortunately higher than elsewhere, based on a myriad of factors including our remoteness, climate and lack of manufacturing.
Client Imagery and Design Questionnaire
We often have clients ask about the relative costs of imagery they provide sourced from books, magazine or online from Pinterest and Houzz. While it is always difficult from distance to evaluate projects we were not intimately involved in, we can make educated guesses. More often than not, clients seem to prefer the more expensive imagery! When we look at the design questionnaire we are looking for big ticket items or complex design problems, for example: home automation, theaters, elevators, etc. These automatically perk our interest and will be a topic of budget discussion.
Project Scope and Complexity
The scope and complexity of a project are directly based upon client interviews, design questionnaires and client imagery. We know fairly quickly if there is a disconnect between the stated scope and the desired scope. We try to highlight this fairly quickly and have honest discussions about expectations.
Initial Schematic Design
The first design work on paper is usually another good check on the project budget. We discover quickly whether stated square footage, scope, fit and finish, priorities and actual budget will align. This typically occurs within the first few weeks of a project and gives us a good chance to make sure the the project is headed in the right direction.
Overall Project Budget
During the course of our design work we assist clients to evaluate their entire budget to evaluate the project feasibility. While the entire cost is sometimes difficult to discuss, we find it sheds light on the overall value of the endeavor.
We have a budget exercise that can help with this client decision making:
(set your construction budget and add percentages of construction for other items to total- for example if a client has a $500,000 building budget the numbers will be as detailed below)
Total Project Budget Estimating
Land Cost (recommended) 20-30% $100,000-150,000
Construction Budget (building only) 100% $500,000
Construction Profit/Overhead 20% $100,000
Architecture, Permit, Survey, Engineering 5-10% $25,000-50,000
Land development and landscaping 4-8% $20,000-40,000
Appliances and Furnishings 4-6% $20,000-30,000
Contingency 10% $50,000
Subtotal Project Budget 163-184% $815,000-920,000
Other items to consider:
Ongoing maintenance .5 to 1% of construction budget/year $2500-5,000
Financing Costs variable
In other words, realistically only 55-60% of your total project dollars will be allocated towards the actual physical structure itself.
While the above example lumps Architecture together with permitting and other pre-construction services, our typical design fees our historically about 5% of a project's total cost. While we strive to help clients understand project costs, we also want to help them understand what an Architect can bring to the process- the resulting added value we believe is much more than our 5% cost.