Benefits of Cost Estimation

10 Jun

Benefits of Cost Estimation

A cost estimation study is an engineering process. It is recognized and accepted by the Internal Revenue Service (IRS), that identifies building costs and land improvements. This study results in increased evaluation, significant tax savings and therefore helps in estimating increased cash flow.

This study is beneficial for any type of commercial property, including office buildings, manufacturing facilities, retail centers, single tenant retail, hotels and apartment buildings. Many companies like www.iambuilders.com provide construction estimating services that play a vital role in various construction processes.

What Are The Methodologies Used in Preparing a Study?

A successful study comprises elements of the engineering, architectural, accounting and tax disciplines. The IRS prefers the more accurate use of an engineering-based approach in identifying and reclassifying construction costs.

According to the IRS Cost Segregation Audit Techniques Guide, preparation of cost segregation studies requires knowledge of both the construction process and tax law involving property classifications for depreciation purposes: “The detailed engineering approach from actual cost records, or ‘detailed cost approach,’ uses costs from contemporaneous construction and accounting records. In general, it is the most methodical and accurate approach, relying on solid documentation and minimal estimation.”

Why Do You Need a Specialist?

A specialist is required for this purpose because there are a lot of things that should be considered during the estimation. This includes a wide range of building components, such as electrical installations, plumbing, mechanical components, and finishes. The specialist helps the property owners to save a lot of money.

A Valuable Strategy

It is one of the most valuable cost-saving strategies available to commercial real estate owners today. Effectively, the studies provide more accurate results and enable the building owners and contractors to achieve the maximum benefit and help in saving the money.

These services even help to keep your business in control. By using construction estimating programs you can save a lot of time and money. Construction estimating services are rising day by day, check this site to know more about the demand for construction services.