Multifamily project costs are at an industry average of around $350 per square foot. As costs for consumer goods keep rising, contractors should carefully review and audit expenditures. In fact, the average net profit margin for construction businesses ranges from just 3% to 7%, according to ProCore, so opportunities for savings are both critical and sparse. See below for a few ways contractors can take their overhead costs into account when preparing bids.
Streamline Vendor Choice and Supplier Selection
According to Forbes, the average bathroom remodeling jobs cost around $10,000 and can reach as high as $30,000. Installing a new shower, plumbing, and vanity alone can account for $5,000 to $10,000. In the kitchen, average remodeling costs are estimated at nearly three times the price of a bathroom remodel. With such large costs, streamlining vendor choice and supplier selection is key. For example, reviewing vendor contracts closely to find more favorable terms, consolidating orders, or omitting unnecessary services can go a long way. You’ll end up ensuring materials are available at the best price and quality while eliminating excess administrative costs to help you negotiate a better rate on materials. Many brands, including Peerless Faucet, for example, do a great job at offering high-quality, cost-efficient kitchen and bath fixtures.
Keep Labor Costs Top of Mind
Labor is the costliest portion of any construction project, as it can account for 40% to 50% of total project costs. Contractors should do their research, select an experienced, reputable workforce, and adjust its size based on the project’s demand so that jobs are completed in a timely manner and without overstaffing.
Save on Interior Construction and Identify Cost-Efficient Fixtures
When thinking through interior finishes for multifamily renovations, contractors can reduce costs without sacrificing quality in multifamily ways. Open-plan layouts will help as they minimize the need for interior walls and doors. Selecting alternate materials (i.e., drywall for ceilings) can also cut costs while ensuring quality and aesthetics are up to par.
Purchasing interior accessories from a wholesaler is another quick, easy way to save. If not streamlined, kitchen and bathroom fixtures are costs that can quickly burn through budgets. Selecting functional, efficient fixtures that won’t break the bank can help perpetually pass savings on to property owners or potential tenants interested in buying long term. According to Peerless, it realizes that multifamily project developers and contractors need to stick to their budget and create a space with reliable plumbing fixtures that not only look good but also function well. From showerheads that maximize water droplets to faucets that are easy to install, Peerless provides the pro community with smart solutions for the kitchen and bath.
Proper cost planning can make or break the efficiency of any multifamily project or renovation. With slim construction profit margins, it’s important to look for every savings opportunity possible—without compromising quality and aesthetics. Streamlining vendor choice and supplier selection, managing labor costs, saving on interior construction needs, and identifying cost-efficient fixtures are some ways contractors can keep costs low.
For more information about Peerless and its multifamily project offerings, visit peerlessfaucet.com/faucet-professionals or follow Peerless on Instagram, Facebook, or Pinterest.
