April 19, 2011

My Personal Construction Cost Estimator Rule : Multiply By 2

It seems anytime I figure out how much I think home repair or construction should cost the actual costs end up double my estimate.

One of our rental properties had a plumbing problem a while back.    It seemed like a minor problem to me that a plumber should be able to fix for $200 or so.   Cost estimates were: $400 to $800 depending on if we want the 'minor' fix or the 'replace with new' fix.       When we had our home air sealed and insulation added I had guesstimated it 'should' cost something like $2000 to $3000 and the final cost was closer to $6000 (before government and utility rebates).  This is pretty typical of how my estimates on home repair or construction costs compare to the figures that contractors will cite. 

This has lead me to create my own rule of thumb:

Home repair costs = what I think it will cost X 2

Maybe I'm just a cheapskate who routinely underestimates what it costs to fix stuff.   I'm not saying that contractors are regularly over charging me or ripping me off or anything.   When we get quotes for major work we try and get 2-3 quotes from various contractors.  I think some prices are higher than others of course.   But I think I underestimate the costs because I just routinely underestimate how much materials and labor will add up. 

This 'rule' may or may not work for you.    Maybe your better at estimating home repair costs or maybe you're not a cheapskate like I am. 

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