(3-min read)

“Suppose one of you wants to build a tower. Won’t you first sit down and estimate the cost to see if you have enough money to complete it?” – Matthew 14:28

If you’re getting ready to undergo an extensive real estate or commercial construction project, it is essential to consider all of the costs of construction. While the hard costs are the easiest to take into account, it is also important to factor in the soft costs. Let us explain the difference.

Hard Costs of Construction

The hard costs of construction are also known as the “brick and mortar costs.” Hard costs most commonly refer to any aspect of acquiring physical construction materials that have a fixed rate and labor involved in construction. These costs include structural elements, the plot or site location, as well as the accompanying landscaping. Included in hard costs are also the most predictable expenses — the cost of utilities, safety systems in place, heating, air, grading, paving materials, grass, trees, bushes, and the like. 

Though the hard costs are what most people consider when considering a new construction project, there’s only one problem with this process — it’s difficult to consider the hard costs without a design. Unlike hard costs, design services would fall under what are considered “soft costs” of construction.

Soft Costs of Construction

What are considered the soft costs of construction? Most soft costs are those only roughly related to your construction project, but are still completely necessary. To put it more simply, if there is a cost related to the construction or maintenance of your location that isn’t directly bolted down to the structure itself, that can be turned on/off, or can be activated or canceled, it’s likely a soft cost.

Some examples of soft costs include:

  • Architectural firm fees
  • Engineering firm fees
  • Site clearing and building permits
  • Taxes
  • Moveable furniture
  • Office equipment
  • Building maintenance services
  • Insurance
  • Location security

How Can I Budget For Soft Costs?

Though soft costs are typically the smaller half of the budgets, they are costs that need to be taken into account of your building and maintenance budget. This process can be tricky because specific rates may fluctuate over time, and prices may change. Considering the state of the market and analyzing historical data is likely the best means of budgeting for the soft costs of your construction project.

In Conclusion

  • Hard Costs: The solid costs related to the physical construction of your new structure.
  • Soft Costs: The design, planning, and ongoing maintenance of your new structure.

Still confused? We can help.

If you’re still confused about the difference between hard costs and soft costs in regards to an upcoming construction project, the experienced professionals from Cowen Construction in Tulsa, Oklahoma can help.

Learn more about and reach out to Cowen Construction today.