Things To Include In Your Project Estimate

In addition to material and permitting costs, you will have a number of other choices to make in planning and estimating your costs. Here are a few of the issues you might want to consider while preparing your Project estimate.

The Cost of Hired Labor
Probably the most important thing you will do before you start your Project is to make a realistic estimate of the total cost.  Although the material costs are significant, the total cost of construction will depend on how who will provide the site labor and whether you will use a General Contractor to supervise that labor. Consider this…

Hiring Labor Direct:

A carpenter/laborer around our part of the country can be hired directly for about $18.00/hour
Workers Compensation adds about 40% $7.20
State Labor Taxes (Unemployment, Emp. Training, Disability)  Approx. 8% $1.44
Fed Labor Taxes (SS, FUTA, Medicare) Approx. 11% $1.98
Cost to Hire an Employee $28.62/hour

Hiring Labor Through a Contractor:

Base rate with insurance and taxes (from above) $28.62/hour
Cost of Mandatory Health Insurance (Full Time Employee ) Approx. $2.00
Cost of Contingencies (Typically 15% of Labor Costs on small job) $4.59
Cost of Supervision and Office Overhead (Typically 25% of total on small jobs) $8.80
Cost of Labor to Job $44.01/hour


Mark Up for Profit (For a small job assumed @25%) $11.00/hour
Contracted Labor Cost $55.01/hour

The numbers are approximate but these are the amounts per hour you can expect to save by building for yourself or hiring your own labor. If your net pay is a lot more than that shown, you might want to consider hiring out the job. We have estimated the average hours to complete a 400sf backyard cottage at about 900. That means you could realize a $50,000 savings over the Contractor’s labor rate by doing it yourself.

Material Costs by You or A Contractor
We have made your job easy when it comes to material costing. If you purchased our “Material Pricing Package" you should be able to accurately estimate the material for your Project. To find your material costs, just go to the web page describing your chosen plan and use the price shown. For a typical backyard cottage, the material cost will vary from $15,000 to $25,000.

If you decide to hire the Project out to a General Contractor without our "Material Pricing Package", the material costs you end up paying may increase significantly. Remember our costs are direct, without any mark ups or any overhead time added for the usual laborious task of “Buying the Job”. Contractors on small jobs could add 10% to 20% to material costs for estimating, purchasing, receiving and contingencies. Add another 40 to 50% for supervision, overhead and profit and the total material costs could be increased by 60 to 80%. 

In addition to the issues of contractor mark ups, overhead and contingencies, it should be stated that we spend considerable time researching our materials for value and suitability. It would be financially unfeasible for a General Contractor to put that much work into buying materials for such a small job.

The Cost of On-Site Utilities
All of our Cottages will require hook ups to electrical service. Most will require a connection to a sewer and water line. A source of gas will have to be provided for the high efficiency instantaneous hot water heaters we specify. A separate cost for each of the utilities should be developed when estimating your total costs. A brief description of each utility service follows to help in that costing:

  • Electrical – It is assumed the electrical service will be supplied by an underground conduit run between the house and the Cottage. The conduit is assumed to terminate under the “crawl space” of the main house or in an exterior wall of houses built with slab-on-grade. Once the wire is inside the house, it can be run to the Main Electrical Distribution Panel. This part of the work should be done by a Licensed Electrician. The electrician should evaluate the electrical panel before any work is started to insure the main service is capable of handling the added Cottage electrical load. It is beyond the scope of most owner-builders to handle this task.  You should get a price from an electrician. You can probably save some money by digging the trench between the main house and the Cottage, but the rest should be done by a professional.
  • Sewer – Because we cannot predict how long or where sewer lines will have to connect, all our cottages are designed to flow to a small sewage pump system. The sewage pump is included as part of our materials package. Sewage from the pump flows through a small PVC pressurized pipe to the “house sewer” in the main structure. From there it will flow to the public or private, main sewer line or septic system. The pressurized pipe solution was chosen to alleviate the problem of insufficient slope on a gravity pipe or the problem of placing the cottage on a low spot on the site. The shallow PVC pipe is a very cost effective method of sewage disposal on nearly any site. We have estimated a length of underground trench in the materials cost. This can be adjusted as required. All the installation work involved with the sewage disposal system should be possible by the average owner-builder.
  • Water – The water line will be small diameter PVC pipe which will run underground from the Cottage to the main building service. The length of line will depend on the location of the nearest main building water connection. It should be noted that on buildings requiring Fire Sprinkler Systems, the water line will have to connect between the main water meter and the main house. Adjustments in the estimate for actual length should be anticipated. The work described can be accomplished by the average Owner-Builder.
  • Gas – The hot water heating system of all our cottages is assumed to be fueled by bottled propane gas. The extremely high efficiency instantaneous water heaters specified can only be fueled by gas. The small quantity of fuel required is proposed to be stored in a portable propane tank located behind the Cottage adjacent to the water heater. A bottled gas solution was proposed since it is universally available and does not require a long underground run of gas piping. The cost of the water heater, propane tank, controls and piping are included in the materials estimate. We recommend a propane distributor or plumber install the gas piping and gas controls.  The water piping can be done by the average Owner-Builder.
  • Telephone-Cable-Networking – Underground low voltage direct buried cable or conduit can be used for the telephone, cable and networking wiring, if required. The systems should run from the cottage to the nearest practical location on the main building and tie into the existing system. This work, on all but the most complex networked homes, can be accomplished by most any semi-skilled person.

An Estimate of Permitting Costs
Permitting Costs are something we have very little influence over. Typically, permitting for a “Backyard Cottage” classified as an “Accessory Structure” would not require a large zoning review or permitting fee. On our local projects the costs can run from $2000 to $5000 dependent upon the structure size and the municipality. Sometimes “Use Fees” may apply to accessory buildings, as well as, the main home. We suggest the easiest and most accurate way to determine these costs is to take our "Site Assessment Questionaire" to your Building Department and ask them.

Plans and Documentation
There should be little need for additional architectural and engineering plans for your Project if you purchase a set of our plans. The cost of our Plans and Documentation Services is listed with each plan set for your budgeting purposes.

Surveys and Site Plans
It is not uncommon for a Building Department to require a formal survey of your site prepared by a civil engineer or a land surveyor. If that is a requirement in your community, it is a good idea to ask exactly what information will be required on the survey. If you find that you need a survey and you do not already have one, you can get get a quote from a local firm.   If you don't think you know enough to order the survey and we can arrange for one for you. You should figure approximately $800 to $1200 for a simple subdivision lot survey. Note that adding contour lines on a sloping site may increase that cost significantly.

Green Code & “Special” Inspections

  • Green Code - If you live in California you have some additional costs to consider. Over the past few years the State has enacted “CAL Green” which is intended to limit pollutants, conserve water, save energy and generally save the planet. Some of the implications of this new code mean you will need a variety of inspections that must be made by registered, private “Green Code Specialists”. These inspections include monitoring refuse, testing moisture content in wood, HVAC testing, checking material specifications for proper environmental certifications and reviewing a project’s “MSDS” hazardous material sheets. The cost for a small project of backyard cottage size is yet to be determined but you should at least guess at a figure for your budget. We are assuming the cost to be $1200 - $1500 for each project.
  • “Special” Structural Inspections – The National Building Codes have begun to require that the Builder of a Project pay for a third party, “Special Inspector”, to inspect their buildings at various times during the construction process to insure the structural provisions of the Code are followed. This would be a bit over the top for the small backyard buildings we are talking about here; however, it is possible that your Building Department might request this. If so, you should ask, so the cost can be included in your estimate. The inspections could add several hundred dollars to your Project.

Some of our Certifications and Memberships