What do the pros typically professional builders spend on new home construction? Are there any ballpark figures out there that can help you see if anything is out of line? Indeed there is.
The total cost of an average new home in the U.S. breaks down thusly, according to the 2004 Cost of Doing Business Study: The Business of Building, published by BuilderBooks.com, a division of the National Association of Home Builders (NAHB).
- The finished lot costs 20-25% of the total selling price, with half of that reflecting infrastructure costs, such as utilities and driveway.
- Building materials, everything from foundation and flooring to porches and roofs, cost 25-30% of the total.
- Onsite labor costs 20-25%.
- General overhead is about 6%.
- Financing costs are about 2%.
Thinking of being your own general contractor to save money? Small-volume builders (constructing an average of 4.9 homes a year) who built exclusively on their clients’ land had an average gross profit margin of 18.9% and an average net profit of 4.8%, according to the study.
If you decide to build your own home, you won’t earn all of that 4.8%. You’ll incur higher labor costs, as subcontractors perceive you as a one-off project and adjust their prices accordingly. Additionally, specialty tools for log construction will also be pricier.
Professional log and timber home builders prorate their tool’s costs over several jobs. Insurance costs will be higher since companies view you as a greater risk. You’re likely to make costly mistakes that pros avoid, resulting in higher expenses for time, materials, and labor.
Key Areas Where Professional Builders Invest Their Resource, materials and equipment’s
Professional builders’ spending habits vary widely based on project size, location, and construction type. Here are some key areas where builders typically allocate their budgets:
- Materials: This can range from lumber and concrete to high-end finishes, depending on the project scope. Our company has unique products: fire brick, refractory brick, wall cladding, facing brick, facing tiles, roof tiles, roof tail, roof taly, and ceramic brick.
- Rental Equipment: Builders often need to invest in or rent machinery and tools, which can include everything from basic hand tools to heavy equipment (cement concrete mixer, cement concrete mixer truck, construction wood, truck rent, bamboo and etc.)
- See more details on rental equipment
If you’re looking for more specific figures or examples, let me know!
