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Learn about the 'Other Costs' you may need to consider adding to your Estimate to adjust for your Location, account for unforeseen repairs/change orders, contractor fees and taxes.
Publish Date: 12/18/2018
Estimating Adders Transcript
Our Repair Estimator is a pre-built with a Starter Templates that include of over 500 common repair items and unit prices so you can create detailed repair costs estimates for your rehab projects.
But there are other costs & factors that you need to consider when estimating your repair cost such as the Location, Contingency, Contractor's Overhead & Profit, & Taxes., which is why we created the Adders Module
To manage these adders click the Adders tab at the top of the Repair Estimator, which will open the Adders module where you can setup your Adder for the Estimate.
The first adders i the location adjustment adder which allows you to quickly adjust and modify your estimates based upon your location. Our estimate databases include prices based upon the National Average, but if you are in an expensive market on the East or West Coast such as New York, San Francisco or LA, you will need to add on an adjustment factor to account for your market.
If you click on the tooltip next to the Location Adjustment, and click Explore Location Factors, you will be presented with a chart of factors for different % adjustments for around the country. On the west coast, you can see that San Francisco is approximately 30 to 50% more expensive than the National Average.
Once you find your market, you can place the % in the Location Adjustment cell which will automatically adjust your estimate by the %.
Remember, the most accurate way to estimate costs is to review all unit prices in our database and adjust the pricing to fit your local market and local contractor pricing.
The Next adder on the list is Contingency which you can use to cover estimating errors or omissions or any unforeseen conditions on the project that can result in change orders and cost overages. The contingency % can vary widely depending on your comfort level with the Scope of Work on the project, your experience estimating construction costs, and/or your experience rehabbing houses.
If you have experience estimating costs & rehabbing houses and have put together a detailed Scope of Work, you may be comfortable w/ as little as 5% contingency. However, if you have little to no construction experience or experience estimating costs &/or maybe you haven’t seen the condition of the property, you will likely need a much larger contingency to cover estimating omissions & unforeseen issues.
So plug in the amount of contingency % you are comfortable with, and the % will added a contingency budget to your estimate.
Contractor's Overhead & Profit
The costs included in the Repair Estimator assume you will be hiring, managing and subcontracting the work you self, so if you are an investor that is hiring a general contractor to manage your project, you need to include costs for the Contractors Overhead and Profit. General Contractors generally charge 10 to 20% of the project value to manage the project,
So if you are going to be hiring a General Contractor plug in 10 to 20% which will be added to your estimate to have a General Contractor manage your project.
The next adder is Labor Tax which is a tax on the labor costs on the project.
Some jurisdictions charge a tax on remodel and construction labor. Check with your local state and local tax jurisdiction to confirm if Labor Taxes will apply on your project.
And finally the last adder is Material Tax which is the material sales tax you are charged at the store when you buy goods or materials for your projects.
Check with your local state tax rules to find your local material sales tax percentage.