The biggest challenges to watch out for in the construction industry in 2015
When you run a construction company, how you spend your dollars is as important as any home, apartment, condo, office or other piece of property you build. In a day and age when many financial backers and/or construction companies have had to put a halt to current plans, it is critical that individuals backing projects financially and construction business owners make sure the dollars are properly allocated.
With that in mind, what are some of the typical issues that come up as it relates to halts in residential and commercial construction projects? Among them:
First and foremost, the almighty dollar is oftentimes the number one reason projects get stalled. Investors may balk at some of the demands of local planning commissions and/or zoning boards (see more below), demands that mean more funds must be allocated. As a result, projects get red-lighted until (and if) the matter can be sorted out. As time goes by, the cost for projects (especially supplies and manpower) increases;
Whether it is from local residents and/or other business owners or environmentalists’ etc. projects can be halted due to reasons raised by other individuals. When the project initially got the green light, the concerns of others may have been denied – in the meantime – those with concerns about the project have gone to court to seek a legal remedy for their concerns. It is not uncommon to see residential and commercial construction projects get tied up in the courts for weeks, months and even sometimes years;
Another issue is the potential for a change in services such as utilities, phones, Internet etc. Whether the provider is Vonage in Texas or another such company, there might be a problem getting the proper services in place for the residents or business owner/s who will be occupying the new property. In those cases, it is important for all parties to work together to clear up any problems, thereby keeping the construction plans on schedule. Getting in the property on time (even with reduced services) is a start;
Last but not least, something as simple as the weather can be a factor that leads to building delays. While some parts of the nation (Hawaii, California, Florida etc.) typically do not have to worry about such issues, the Northeast, Midwest, Alaska etc. can see construction projects halted for days or weeks at a time in the winter months. Weather delays can ultimately lead to projects running past their original deadlines, resulting in cost overruns.
In the event your construction project (residential or commercial) is delayed due to any of the above-mentioned issues or others, it is always possible to renegotiate the original financing planned or maintain it, then look for a loan to cover the extra time caused from the delay.
As a business owner or contractor, what are some of the typical delays you have faced and how did you work around them to ultimately keep the costs down?
Dave Thomas writes for a variety of websites on topics such as starting businesses and financial issues.