Saturday, May 23, 2015

Square Foot Construction Costs in the Bahamas

By Mark Moyle

One of the most dreaded question a builder is asked is “how much does it cost per square foot to build?” The worst part about this question is that the individual asking the question usually has a preconceived number in their head and does not really want to hear anything else. The conversation usually ends up as an unfriendly debate between the builder and a new property owner …….

The new property owner has done his research and states “some guy at the bar told me he can build a house for $100 a square foot”

While the seasoned builder knows from years of firsthand experience that the “guy at the bar” is blowing a lot of smoke at the new property owner.

Well, building for $100 per square foot is not entirely impossible. Get a local draftsman to reproduce a simple rectangle on a piece of blue paper, manage the entire project yourself, convince your friends and family in the industry to give you insider deals, beg, steal and borrow all the materials you can, source illegal immigrant labor, use cheap windows and doors from China, cheat customs duties, forego baseboards and trim, use clearance discounted floor tiles, slap on a coat of no-name paint, fashion cupboards on-site out of left-over roofing ply. You’ll get yourself a kitchen, laundry, two bedrooms, living room and one bathroom in 1,000 sqft for $100,000.


And it will look something like this….


Unfortunately the Devil is in the Details. If you want something more like this….


Here are the numbers

Estimated
Per SQFT
Running Total
Base Structure Cost & 1,000 square feet
$100,000
$100 sqft
$100 sqft
Add Local Building Contractor’s Profit
$20,000
$20 sqft
$120 sqft
Add central Air Conditioning & Insulation
$20,000
$20 sqft
$140 sqft
Upgrade Roof to Spanish Tile
$15,000
$15 sqft
$155 sqft
Add Decorative Architectural Features - Interior
$10,000
$10 sqft
$175 sqft
Add Decorative Architectural Feature - Exterior
$10,000
$10 sqft
$185 sqft
Upgrade Windows and Doors
$10,000
$10 sqft
$195 sqft
Add Generic Appliances
$5,000
$5 sqft
$200 sqft

And don’t forget about the exterior curb appeal
Add an Allowance for Exterior Hardscapes (Driveway, Fence, Paths)
$20,000
$20 sqft
$220 sqft
Add an Allowance for Landscape (Turf, irrigation, plants)
$30,000
$30 sqft
$250 sqft

This would be at the higher end of the typical Bahamian homeowner’s expectations. Not just a dwelling to survive in but rather the A/C chilling, kids playing in the yard and dinner in the oven.

$250 a square foot!


Now the problem is that these days, for most young professionals and second home owners that are actually out researching the cost of building in the Bahamas, is that the above house is entry level. So let’s go back to the original base structure of $100 a square foot and estimate a 5,000 sqft custom home that will require an extremely capable team a year and a half to build and see what else we can add to our list of needs and wants :



Estimated
Per SQFT
Running Total
Base Structure Cost & 5,000 square feet

$500,000
$100 sqft
$100 sqft
Add an Internationally Recognized Design Team (Architects &Engineers)

$375,000
$75 sqft
$175 sqft
Add Owner’s Representatives (Accountant & Project Manager to make sure the architect and contractor behave)

$300,000
$60 sqft
$235 sqft
Commercial Building Contractor’s Overhead & Profit (General Conditions)

$750,000
$150 sqft
$385 sqft
Fleetwood Hurricane Proof Doors & Windows

$350,000
$70 sqft
$455 sqft
Extensive Reinforced Concrete Architectural Features & Hardscape

$300,000
$60 sqft
$615 sqft
Infinite Swimming Pool with Wrap-around Ipe Deck

$150,000
$30 sqft
$645 sqft
Exotic Hardwood and Stone to Interior & Outdoor Surfaces

$200,000
$40 sqft
$685 sqft
Interior Exotic Hardwood Door & Trim Package

$150,000
$30 sqft
$715 sqft
Sophisticated Textured Finishes to Interior & Exterior Walls (that don’t have exotic wood and stone on them)

$100,000
$20 sqft
$725 sqft
Poggenpohl Cabinets & Countertops

$275,000
$55 sqft
$780 sqft
Lutron Whole-House Lighting and AV Controls

$125,000
$25 sqft
$805 sqft
Waterworks Plumbing Fixtures Throughout

$50,000
$10 sqft
$815 sqft
Restoration Hardware – Electrical Fixtures & Bathroom Accessories

$50,000
$10 sqft
$825 sqft
Viking Appliances

$50,000
$10 sqft
$835 sqft
High Level MEP Specifications & Infrastructure (High Seer AC, Schedule 80 pipes, etc)

$75,000
$15 sqft
$850 sqft
Landscape & Irrigation Budget

$250,000
$50 sqft
$900 sqft
Back-up Generator, RO Water Maker and Associated
Storage & Equipment

$250,000
$50 sqft
$950 sqft
Change Orders

$250,000
$50 sqft
$1000 sqft

That’s right. This whole program can get up to $1,000 a sqft and often does when the uber-rich wash up on a beach here. This is also by no means a limit. Until a few years ago, I had not heard of Fleetwood Windows & Doors but I believe they are the best manufacturer of doors and windows in North America. Now I have clients asking for Windows and Doors made in Switzerland that cost three times as much. That’s three times as much to buy, three times as much on shipping and import duty and three times as much to fly some Swiss specialists over to install them.

But coming back down to earth. This blog is to help you get an idea of what your house is going to cost to build in the Bahamas. Most of you are going to fall somewhere between $250 and $500 a square foot because you want a nice house with a few trimmings but don’t need all of the above. I am going to write another blog about those trimmings to give you an idea of what you really want and what you really don’t need. In the meantime, please don’t listen to the guy in the bar. Please don’t listen to me either. There are highly trained and experienced experts in the Bahamas that specialize in construction costing and for a small fee they will give you an official estimate of what your costs will be. Treat it like a business plan and consult with them before you even purchase a property to build on. It may be the best money you never spent.


These are two of my favorite firms. If anyone knows of any other good ones, please let me know and I will add them to the list.

And just in case you are huffing and puffing at my numbers - have you ever traveled around this beautiful archipelago, such a short distance from the USA, and asked yourself why there are so many glorious beach front and ocean view properties that have real estate signs on them instead of houses?

Happy tourist sees beautiful beach front property for cheap.

Happy tourist is told by guy in bar he can build for $100/sqft. 

Happy tourist is told by real estate agent it is possible to build for $100/sqft.

Happy tourist is told by conveyance lawyer it is possible to build for $100/sqft.

Happy tourist is told by architect it is possible to build for $100/sqft.

Happy Tourist has a budget of $500,000 and therefore commissions architect to design a 5,000 sqft house (with swimming pools, custom kitchens, etc)

Happy Tourist gets three quotes which average $2.5 million to build the house

Very Unhappy tourist convinces himself the local builders are out to get him so he calls up his friendly real estate agent to plan a quick exit from the Bahamian Property Owners Club

4 comments:

  1. The costs to build a home in The Bahamas are outrageous which is why the construction industry seriously needs proper oversight. The "professional builders" are no different from the "guy at the bar" since it is all about the money aka greed. Either way, homeowners are getting screwed with little to no protections. Fix the construction "systems", fix the greed problem.

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    Replies
    1. Hi Athena. Whilst I agree that there are some very greedy builders out there, it is a little unfair to blame the high cost of construction on ALL builder's greed. It is a very competitive market out there and if you do your homework and understand what the realities are and know where the money should go, there is no need to be a victim of any builder's greed. Having said that, some regulatory oversight probably wouldn't hurt.

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  2. 5000 square feet to sit by the ocean? What a hoax. Give me the simple life....keep your stress.

    ReplyDelete
  3. I found your blog in a search for "Bahamas construction costs". I think the cost breakdown tables are exactly what I was looking for; better than expected actually. They are a very useful introduction to managing your expectations. Each project is unique and all variables will need to be adjusted by location, time, and quality. The real message is "be aware". Before buying any property (in any market) invest in knowledge. Have an architect sketch your dream, verify that it's legal, and get to know a local builder who can verify that your budget and dream are in sync. As I said, manage your expectations.

    ReplyDelete