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Put Together a Realistic Construction Budget

If you are buying a project with approved building plans, or if you’ve just submitted your construction drawings to the City / County for building permits, you need to put a realistic budget together and get your financing in order before you break ground.

A realistic construction budget will make you more credible to prospective lenders, and will also help you sleep better at nights.


A realistic budget should include at least the following:

  • Soft cost – architect, engineers, surveys, Title 24 study, impact fees

  • Off-site improvement costs (e.g., sidewalk, street lamps)

  • Demolition and site prep cost

  • Vertical construction cost

  • Finishing material cost

  • Hardscape, landscape, driveway costs

  • Holding costs – property tax, builder’s risk insurance, interest reserve

  • Contingency – 10% to 15%

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