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5 Important Steps You Can Take to Deal With Rising Maintenance and Construction Costs in 2024

12/01/2023 5:11 PM | Anonymous member (Administrator)

By Nate Skrdla, Rob Kabza, ASR Companies 

It’s probably safe to say that maintenance and construction costs are going to go up, perhaps way up, in 2024.   Why?  Ongoing economic uncertainty in the market, higher interest rates, continued labor shortages, rising costs of materials, and (oh lucky us…) a highly charged political season.

We know it’s coming…the question is, what can we do about it?    While there’s not much we can do about the conditions on the ground, there are some steps we recommend every property manager or HOA board member take to help mitigate the chaos and uncertainty (and hopefully keep your costs as low as possible). 

Here are five important steps you can take to mitigate and manage planned project cost increases in the coming year:

  1. Pre-Plan, Pre-Plan, Pre-Plan.  The more work you do upfront before engaging with a construction company the better.  If your project involves structural elements (or if you’re unsure), the first step is to get an engineering analysis and recommendations prior to talking with contractors.  The more detail you can provide the contractors, the better.  Early planning with your residents is important as well.  They need to know what to expect so they can arrange their lives accordingly. 

  1. Focus on the Desired Outcomes and Encourage Construction Companies to Offer Creative Solutions.  What do you want from this project?  How do you want your life and your tenant’s life to improve?  What do you want your tenants to experience before, during, and after construction?  What are the needs of your community when it comes to access, safety, feedback, etc.  What are your budget constraints?  What is your list of MUST HAVES and LIKE TO HAVES?  Share all of this with the construction companies you ask to bid on a project.  Ask for multiple solution options to solve the problem and deliver the best value. 

  1. Insist on Seeing the Details, and Make Sure You’re Comparing Apples to Apples.  When comparing bids, make sure you’re getting the same level of detail from each party you’re considering.  Make sure to discuss staging areas, security, safety, and trash removal as part of this process.  Consider using an outside, objective expert to help you assess competing bids.

  1. Work With all Stakeholders on Various Ways to Ensure Value.  Before your project starts, look for ways you could partner with the construction company to save time or money.  Can you make space available for them to safely store tools or materials on site?  Can you allow access to a greater area or allow multiple phases of the project?  Can you be flexible with hours, or access, etc.? 

  1. Be Aware of Potential Bottlenecks and Make Sure Your Construction Company is Transparent and Communicates Throughout These Steps.  The industry changed during the pandemic, and many of those changes continue today, including:
  • Permitting slowed from days to weeks, even months.
  • Lending institutions slowed loan processes.
  • Supply chain resources and supplies became unreliable. 
  • Decision makers are more hesitant to make timely decisions due to general uncertainty.
  • Many additional issues beyond the specific projects.

Some of these things can be sped up while others are out of everyone’s control.  The key is to insist on regular communication between you and your construction company, as well as ongoing communication with all stakeholders involved.

About Rob Kabza, President of ASR Companies Rob has over 26 years of construction management experience in Colorado, with a primary focus on project management, construction operations and reconstruction projects. He oversees production and quality management, and provides leadership for all projects from the preparatory planning phase through the construction completion. Rob received his B.S. in Construction Management from Colorado State University.‍

About Nate Skrdla, Director of Construction at ASR Companies Nate has over 20 years of Construction Management in Project Planning, Project Management and Purchasing experience. His focus is on Trade Partner, Vendor and Supplier relations. He supports the production team in meeting project goals, timelines, and budgets. Nate received his B.S in Construction Management from the University of Nebraska at Kearney.

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