Financial Considerations of Modular Construction
Clients will need to know a few things about commercial modular construction regarding cost or even better about the financial factor. With the financial factor we are definitely going to need a neutral box to check. It’s often neutral and tough to predict in advance of the project.
Here are some issues relating to costs. First, payments are often higher earlier in the process given the materials and modular building process is ramped up for early by the factory. Transportation of modules and use of cranes is expensive and the factories themselves have overhead costs that are arguably higher and costlier to set up for a job than a traditional construction firm with subcontractors. The upside is with less down time attributed to the controlled environment in a factory process and building and materials out of the way of inclement weather, there is less down time.
Another, albeit smaller factor, is that there can be costs associated with municipalities who are unaccustomed to the reviews, approvals and third-party inspection programs unique to modular building. For example, they may require “controlled construction,” which will add costs. Many building officials still aren’t quite sure what to make of modular.
With all this said, my bottom line is: past project results show that the time savings produced because of modular construction’s organized process, less site time and cleanup, yields favorable cost comparisons. In addition, time is money and the sooner your project is finished, the sooner you are using your building.
Next week we’ll be finishing the When and Why Modular series with Part Four: The Legal Framework and Wrap Up.
Read the previous posts in this series: