New Construction: Build From the Ground Up

Start before the building starts

Owning land does not mean it is ready to build on. Review the intended use, zoning, access, utilities, plans and required approvals with the appropriate professionals. These affect what can be built and when work can begin.

Build a complete project budget

The budget can include land, site preparation, physical construction, plans, engineering, permits, utility connections, financing and a contingency. Hard costs generally mean physical building work; soft costs generally mean professional and administrative project costs. Definitions vary, so identify what each budget line includes.

Plan for completion and repayment

The project needs a realistic schedule, contractor plan and funding plan. Construction financing may release money in stages rather than all at once. Also consider the completed property’s sale or rental prospects and the source of repayment. Cost overruns and delays require additional resources.

Your quick checklist

• Confirm the intended use and approval status.
• Identify site work and utility costs.
• Separate the build budget from fees and contingency.
• Understand staged funding and the completion plan.