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Hidden Construction Costs Most Homeowners Forget to Budget For
Building a new home or starting a major remodel can be a great experience, but if you don’t plan ahead, it can also get pretty expensive!
Beyond costs like materials and labor, there are dozens of lesser-know costs that can quickly add up. Many of these costs won’t show up until construction is already underway, making them harder to manage and handle in the future.
Here’s a breakdown of some of the most commonly forgotten construction expenses and how to keep them from throwing your plans off track.
Site Prep and Lot Conditions
It’s important to understand what’s underneath your lot before you begin.
The Ground Beneath the Build
Before any concrete is poured, your lot needs to be cleared, leveled, and prepared.
This includes removing trees and rocks, grading for proper drainage, and if needed, testing and stabilizing soil. Sloped or uneven lots typically require more grading, which adds to both time and cost.
This is usually more difficult in areas with sandy soils or clay-like soils.
Utility Connections
Access to water, electricity, sewer, or gas is not always included in your builder’s base pricing.
If your property is located in a new development or a rural area, installing utility lines or septic systems may cost more than you budgeted for.
Temporary site utilities like portable toilets and electricity generators may also be your responsibility during construction.
Make sure you understand what your builder requires from you before creating a detailed budget.
Permits, Fees, and Local Requirements
Before any construction can begin, you need to make sure you have all required permits, you are familiar with the local building rules, and you pay any necessary fees.
More Than Just Paperwork
Most permits will cost you something and this can vary widely depending on location and the scope of your project.
You may need separate permits for structural work, electrical systems, plumbing, HVAC, and more.
In some areas, additional environmental or impact fees may be charged based on lot size or projected use.
Consult your builder on the likely permits you may need for your project. This can save you from paying expensive penalties.
Required Inspections
City or county inspections will likely be required at several stages of your project.
While some of these inspections may be included in permit fees, others can require third-party inspectors, especially if local departments are backed up or if special systems like solar or advanced HVAC systems are installed.
Design Changes and Custom Requests
Things may change during the course of your building process, be sure to understand how they can affect costs over time.
Mid-Project Upgrades
Choosing to upgrade flooring, change cabinetry, or add built-ins after the project starts will typically result in what’s called a change order.
These often carry material markups and additional labor costs.
Even small design tweaks can change the course of your project leading to extra time spent or needed more permits.
Scope Creep
Homeowners often expand the project mid-build like adding a deck, extending a garage, or installing a new HVAC system.
While these changes may appear minor on the surface, they will add complexity, materials, and days to the timeline.
As stated before, you may even need to obtain more permits for alterations.
Landscaping and Exterior Features
Budgeting for outdoor features like landscaping or decks is important for fully completing your dream build:
What’s Often Not Included?
Builders typically quote for the home structure, not the surrounding land.
As a result of this, considerations like landscaping, driveways, walkways, fencing, and irrigation may not be included in your initial bid.
However, these elements are essential for curb appeal and usability, but they are often left to the homeowner for planning and financial coverage.
Understanding exactly what your builder does and does not offer is crucial to keeping costs and time minimal.
Drainage and Retaining Walls
In some cases, extra grading or retaining walls are required to help with water runoff, especially on sloped lots.
These hidden costs often only become clear after excavation begins.
Storage, Deliveries, and Security
You’ll also want to budget for material storage, delivery, and security:
Material and Tool Protection
You’ll likely need to rent storage pods, lockable sheds, and cover equipment to protect materials from weathering or theft.
In neighborhoods with active construction, it’s not uncommon to install temporary security systems or lighting.
If you do choose to install security systems, make sure they’re regulation-compliant.
Delivery Charges
Large materials can carry delivery fees that aren’t included in the initial contract.
If multiple deliveries of sizable materials need to be made or if your site is harder to access, those delivery costs can add up depending on volume and other factors.
Interior Essentials and Final Touches
Finishing costs can be unexpected but are crucial for completing your project – be sure you budget for them:
Finishing Costs
Not all finishes are included in base pricing, for example, window coverings, closet systems, bathroom hardware, mirrors, shelving, and smart home components are often left out.
These elements will be critical to your project so make sure you don’t forget about them!
Move-In Readiness
After construction ends, you’ll likely need professional cleaning, appliance installation, or various small repairs.
While these can be fairly minor, they are usually paid for out-of-pocket and not covered by your builder. Be sure to over budget if you want to avoid financial issues near the finish line
Inflation and Delays
Inflation and delays can be unpredictable, but they’re nonetheless a fact of life – budget for them:
Price Volatility
The cost of materials like lumber, drywall, and roofing can fluctuate due to market demand or supply chain issues.
Even if you secure a contract, change orders or other delays can expose you to higher prices later in the build.
While this problem cannot be controlled to a large extent, be sure to prepare for these unexpected costs.
Scheduling Costs
Every delay adds costs, time is money, whether it’s extended equipment rentals, rescheduling work crews, or securing temporary housing for your family.
Weather, inspections, and supply chain issues are common causes of overruns.
Final Thought
When building a home, budgeting for what’s on paper is the easy part.
But what’s harder to see yet just as important is to plan for what isn’t written in the contract.
Consider what all goes into remodeling or creating your desired project.
Anything from site prep and permits to last-minute upgrades or overlooked finishes, those hidden costs can quickly derail your plans.
By being proactive, consulting with your contractors, and overbudgeting, you can protect your investment and enjoy the process with fewer surprises.
