RE: Projected Costs vs Real Costs | <– Date –> <– Thread –> |
From: Pablo Halpern (phalpernworld.std.com) | |
Date: Fri, 31 Mar 95 09:51 CST |
Bill made some excelent points regarding why projected costs are so often wrong. Another thing to keep in mind is the time-span of this project. Because residents are involved before construction (often before site-selection), years can pass between the time a group comes together and the time the first household moves in. During that time, prices invariably go up. A few years back, New View took a survey of our members asking "what do you want to spend on a house?" and "What is the most you are willing to spend on a house?" We exceded everybody's upper limit! However, if we were to take those numbers and correct for inflation, we didn't do as bad as we thought (although we still are way high). The moral of the story: increase your target budget each year to account for inflation. It will make your target budget more realistic. Another suggestion: Add a hefty 25% contingiency to your early budgets. Reduce this contingiency and revise your budget at milestones that increase budget certainty: e.g. once you know how much your land will cost. When construction begins, your contingiency should still be 5% and prefereably 10% of your total budget. Finally, there are customizations. For most people, cohousing will be their first (and possibly only) experience in having a house built for them. The temptation to customize your house is irrisistable. Customization costs money. Even for inexpensive items like windows, there are design costs and development costs associated with just being different. New View made some mistakes that cost stretched out our time-line, partially caused by our architects time being used for customizations (even though people pay the architecture fees associated with their own customizations). At the very least, people should be aware that moderate to heavy customizations will add 5-10% or more to the cost of their house. The bank mortgage the full amount, either, so you might need more than a 20% down-payment. Depending on the group, it might be feasable to severily limit customizations. - Pablo ------------------------------------------------------------------------ Pablo Halpern phalpern [at] world.std.com (508) 435-5274 Hopkinton, MA, U.S.A. ------------------------------------------------------------------------
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RE: Projected Costs vs Real Costs BPaiss, March 30 1995
- RE: Projected Costs vs Real Costs Pablo Halpern, March 31 1995
- RE: Projected Costs vs Real Costs Rob Sandelin, March 31 1995
- RE: Projected Costs vs Real Costs Mark Ontkush, March 31 1995
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