Hard Costs Vs. Soft Costs

Did you know that there are different types of costs involved in a construction project? Knowing the difference between them will help you have more meaningful conversations with contractors, architects, and other people involved with your project. 

Hard costs typically refer to the costs involved directly with constructing a building. This means that any costs for the building’s structure, construction site, and landscape are included in those types of costs. Because these things are more tangible, they can be estimated fairly easily. Keep in mind that any contractor costs for labor and material are also included in hard costs. Some hard costs that are easily forgotten about in early planning stages include utility placement, grading and excavation, paving, and HVAC systems. 

Soft costs on the other hand, are costs that typically cannot be seen. These costs are not directly related to the labor or materials of constructing a building so they can be harder to estimate in an early budget. Typical soft costs include a wide range of things from architect’s fees to inspections, engineering, permitting, taxes and legal fees. Other easily forgotten soft fees include furniture, computer equipment, or phone/data systems. 

Understanding both costs involved with construction will better prepare you to make informed decisions on the construction of your next project. Many people forget to include the soft costs of a project when they are looking at their budget and find they have been overextended once things get started. Portioning your budget correctly for the different costs involved with construction will make for a less stressful process and a better end product. It is very easy to want to put all of your budget towards things you can actually see, but knowing the value that soft costs can add in a well-planned building is important to consider.