An experienced construction industry professional, William Londos serves as the vice president of preconstruction at ACM Design & Build. From his office based in Miami, Florida, William Londos oversees pre-construction work including budgeting for costs.
There are two types of costs for construction projects - hard costs and soft costs. Estimating both correctly at the pre-construction stage is critical for smooth development.
Hard costs are determinable and quantifiable. They relate directly to actual construction work, from design to engineering, and typically make up 70 percent of construction costs. Hard costs include those related to the building structure (labor and materials), site preparation (underground utilities, drains, paving, and grading), and landscape. Because these costs are quantifiable, many estimators use previous construction projects to estimate the hard costs of a new project, plus a contingency for unseen conditions.
Soft costs refer to nontangible costs that do not directly involve actual building. These include architectural and design fees, building inspection and permit fees to local governments, accounting costs, insurance, and real estate costs such as land appraisal and assessments. Other examples include local and state taxes, construction insurance, and advertising. Soft costs typically make up 30 percent of construction costs.
