Ground Up Construction Calculator

Between 5% and 10% of construction cost is common on a straightforward single-family build, and 10% to 15% is closer to honest on anything with a difficult site, a custom design or a long permit path. The contingency here is taken on construction cost only, not on the land — a land price is a number on a contract and does not overrun, while a framing package quoted in March and bought in September routinely does. If your contingency is under 5%, you are not budgeting for a surprise, you are hoping for none.

Because the loan is at its largest when the build is nearly done, and that is exactly when a slip happens. An extra month at the end costs a month of interest on a nearly fully-drawn loan, a month of taxes and a month of builder's risk insurance — and it pushes your listing a month further into a market you cannot see. The slip table on this page reprices the whole project at longer build periods so the cost of a delay is a dollar figure rather than a feeling. Inspections, utility connections and a certificate of occupancy are the usual culprits, and none of them are on your builder's critical path.

Only the hard cost input is. A builder quoting a price per foot almost always means vertical construction — the shell to finish, on a prepared lot, excluding land, site work, permits, impact charges, design and financing. The all-in figure this page produces includes every one of those, so it will be substantially higher, and it is the only version that is comparable between two projects. When somebody tells you a house was built for a certain number per foot, ask which of the two they mean before you use it for anything.

In fast-growing counties they can be the single biggest soft cost, running into five figures for school, road, park and utility connection charges on one single-family permit. They are also the item most likely to change between the day you price the deal and the day you pull the permit, because they are set by ordinance and reassessed on a schedule that has nothing to do with your project. Get a written estimate from the building department for the specific parcel, and treat a quote more than a few months old as a guess.

No. The interest here is treated as cash you pay as it accrues, which is why it appears in the cash-invested figure. Many construction lenders instead withhold an interest reserve from the loan and pay themselves out of it, so you make no payments until it runs dry. That is convenient and not free: the reserve is borrowed money, it accrues interest of its own, it consumes loan proceeds you could have used for construction, and when it empties mid-project the payments start at the worst possible moment. If your loan has one, the total cost is roughly the same but the cash timing is very different.

Most builders and developers want 18% to 20% on cost before breaking ground, and many will not start under 15%. The reason the bar is higher than for a rehab is duration: you are exposed to a market for a year or more with no ability to stop, the cost of your inputs is fixed only to the extent your contracts fix it, and there is no partial exit — a half-built house is worth less than the land and the sticks that went into it. A margin that looks acceptable on the day you close on the lot has to survive a year of everything moving.