One of the most frequently asked questions we hear is some variation of “How much does a shipping container home cost?” It’s a question that seems simple on its face but is actually quite nuanced.

Nevertheless, people want and need to know how much they should expect to spend on a container house. It’s a number that affects not only affects the size and scope of their project, but in some cases, their very interest in the concept at all.

If you’re new to container homes, our article on container home affordability compared to other alternatives is a great starting point for this discussion. In this article, we get more specific on strategies and techniques for determining costs.

We’ll start by explaining the importance of projecting costs and how you can approach figuring them out. Then we’ll get into the nuts and bolts, describing a few different ways to prepare cost estimates with increasing precision. Continue reading to join us in learning more!

Why Understanding Costs is So Important

If you’re like most people, before you buy something, you want to know how much it is going to cost. Otherwise, you’re handing the seller a blank check!

However, a knowledge of cost has some other uses and benefits beyond just understanding the initial price tag of a good or service. You have to take a more holistic view of the situation.

Knowing Your Budget Means Knowing the Costs

A lot of people get confused between a cost estimate and a budget. They are two separate ideas that go hand-in-hand.

A cost estimate is an educated guess about how much your container home will cost. A budget is how you will allocate finite resources to pay those costs.

It’s important to state that both of things can be based on current or future numbers. By that we mean, what you want and/or what you can afford now isn’t necessarily the same as what they will be in a year’s time or more. So, in a way, using these two ideas together can be a helpful goal setting technique in designing not just a home but a life.

A budget and a cost estimate are closely linked, and you can’t really have a successful project without having both of them. So before answering questions like “Is a Container Home right for me” or “What can I afford”, you really need to be able to understand how much different types and variations of container homes cost.

To Comparison Shop, you need Reasonable Costs to Compare To

Part of separating a ‘good deal’ from a ‘rip-off’ is being able to quickly quantify a reasonable price. When you go to buy a sandwich at a restaurant or a haircut at a salon, you have an expectation of the price.

If the price is too low, you might think something is amiss and maybe you’re not buying what you thought you were. If the price is too high, you’re quick to realize that your business should be taken elsewhere.

But in order to make these decisions, you have to have the knowledge base to use for comparison. That’s where a cost estimate comes in. Whether you realize it or not, you are performing estimates in your head every day in order to make decisions.

All we’re talking about in this article is how to formalize and professionalize some of those internal estimating procedures to give higher quality results.

In the realm of container homes, when you’re able to approach contractors and subcontractors with a better idea of what price you should be paying, you prevent yourself from being taken advantage of and help utilize the competitive marketplace to provide you with the best pricing.

Getting Financing for a Container Home Requires Knowing How Big of Loan you Need

Imagine going to your bank and saying “I want to get a loan for a car, but I have no idea what kind of car I want or how much it costs”. Without knowing how much money you need, how can someone make a decision about giving it to you?

If you want to get a loan to pay for your container home, you need to know how much to ask for. Most banks are going to want to see a detailed cost estimate to understand where exactly you’ll be spending their money. While the process of applying for a loan is complex, having a good cost estimate is an integral step that is necessary to get started.

Background Information Crucial to Construction Estimating

The most important thing to know about estimating is that it’s an art rather than a science. Two people given the same constraints will often produce slightly different estimates, even if they use the same estimating technique.

That’s just the nature of an estimate: you can try your best to get close to what will ultimately be the right value, but there will also be unknowns that require some judgment calls and lead to variability.

Estimating doesn’t require any magic. It’s the application of prediction and educated guessing based on imperfect and limited information. But the good news is, as time goes on, you’ll gather more information about your specific project and your estimates will have increased accuracy.

While you can hire a professional estimator to create your cost estimate, they will need detailed plans and specifications to base their estimate on. Most DIYers have a lot of their ideas stored in their heads, not on paper, and make many decisions on-the-fly. For this reason, even outside of the cost implications, a professional cost estimate is usually impractical for a container home and you’re best served by making your own.

Before creating an estimate for yourself, you need to have clarity on what you want to estimate. This obviously includes the scope of the project on a particular site. But just as important is if you will be paying a contractor to do the build, or will be primarily constructing it yourself.

Either way, the process is the same. But when trying to estimate a contractor’s cost, there are additional elements to consider like profit, overhead, insurance, etc.

Categorization of Costs and Why it Matters

Understanding the overall construction cost of a project requires that you also understand the constituent costs that make up the total. But there are quite a few ways to think about these smaller cost categories.

In one sense, you can think of construction project costs in terms of tangibility. This view is logical for a layperson as they conceptualize the process of constructing a building.

Most elements of container construction project are hard costs; physical items that you can see and touch. Some costs are soft, meaning that they are still cash outflows, but the purchased good or service is more conceptual in nature.

However, it is more helpful to frame costs through some other lenses. Accountants and project managers typically view costs across two dimensions: Elasticity and Assignability.

Cost Elasticity

Elasticity is an economics term that relates how much a change in an independent variable (something like scope, time, or distance) affects changes in a dependent variable (cost, in this case). A perfectly inelastic relationship means that changes in one variable have no effect on the other one. We call these fixed costs because their value doesn’t change regardless of other inputs.

Elastic relationships have some proportionality between the dependent and independent variables. Change the time to complete something and the cost is changed by a proportional amount. We call these variable costs, because they vary based on other inputs.

Cost Assignability

Assignability is the measure of whether a particular cost can be reasonably described as pertaining only to a certain work element, as opposed to the entire project. In other words, it is how narrow or wide the cost applies.

Direct costs are directly related to a specific element of work (which is typically described in the Work Breakdown Structure) and nothing else. It’s a very clear relationship, ‘this pays for that’.

Indirect costs are those that are difficult to tie to one particular area or facet of the project. They are things that are used across time, across functions, etc.

Cost Matrix

In order to better conceptualize these two dimensions of costs and the four types of costs they contain, it’s helpful to view them in a 2×2 matrix. Within each of the four quadrants, we’ve included a couple of example costs to help you better understand each type.

Despite the rigid lines you see visually in the above graphic, try not to get too stuck on where any particular cost item is located. There are always project-specific issues that move things around and some costs will straddle the lines between categories.

Instead, try to understand the bigger picture. The matrix makes it clear that different cost elements will impact the overall project in different ways. As you create new estimates and revise old ones, you can’t overlook any of the four quadrants.

Regardless of which of the estimating techniques you use (and don’t worry, we’ll explain three different options later in the article), you are not actually going to have line-item costs corresponding with any of the four cost categories above. Rather, these costs are implicitly included in the total cost of the project.

Our purpose here is to understand how costs work before we tackle where costs come from and what their value is. In the cost estimates themselves, we’ll break down the costs in other ways that are more conducive to accuracy.

Managing Tradeoffs when Estimating

The art of estimating includes being skilled at a balancing act: How to employ the data you have (and don’t have), in a limited amount of time, to get enough information to make a good decision. In this section, we’ll cover how to think about walking that tightrope successfully.

Acknowledging your Blind Spots with the Knowledge Matrix

It is sometimes said that a good measure of personal maturity is “knowing what you don’t know,” which is basically a modified version of the Socratic Paradox. By having the humility to recognize gaps in your knowledge, you will proceed more cautiously and do your best to find ways to strengthen your weaknesses.

In the world of cost estimating, this principle is informative as well. With inadequate or inaccurate information, you can seriously impact the accuracy of an estimate. Therefore, it’s important to take stock of the things you know and the things you don’t.

The Knowledge Matrix above helps you understand how to manage Knowledge Risk and build the best cost estimates possible. Here is how each of the four quadrants can and should be addressed in your estimates:

Knowable-Knowns: Familiar facts are the most straightforward type of information: things that are both entirely knowable and known to you. You are familiar with what these costs represent and what their value should be. Easy.

Familiar facts are the most straightforward type of information: things that are both entirely knowable and known to you. You are familiar with what these costs represent and what their value should be. Easy. Knowable-Unknowns: Untapped Knowledge represents costs that you may not know personally, but are known by a person or resource available to you. It might be data from Discover Containers, insight from a government office, or the guidance of a local contractor. Again, this is straightforward information to incorporate into your estimate.

Untapped Knowledge represents costs that you may not know personally, but are known by a person or resource available to you. It might be data from Discover Containers, insight from a government office, or the guidance of a local contractor. Again, this is straightforward information to incorporate into your estimate. Unknowable-Knowns: Identified risks are where things get trickier. These are costs that you know exist and agree should be incorporated into your estimate, but neither you nor anyone else can actually quantify them reliably. Typically, these are potential risks that can be anticipated and weighed with judgment and probability even though that can’t be exactly known. Imagine you’re renting a machine, and you theoretically should be able to get the work done with it in two days…but you instead estimate renting it for three days just to be safe because you’ve personally never used the machine.

Identified risks are where things get trickier. These are costs that you know exist and agree should be incorporated into your estimate, but neither you nor anyone else can actually quantify them reliably. Typically, these are potential risks that can be anticipated and weighed with judgment and probability even though that can’t be exactly known. Imagine you’re renting a machine, and you theoretically should be able to get the work done with it in two days…but you instead estimate renting it for three days just to be safe because you’ve personally never used the machine. Unknowable-Unknowns: Complete ignorance is the state of not even realizing there is something you should be accounting for, much less actually doing so accurately. These are costs resulting from situations that are so unexpected or unforeseeable that they aren’t even considered, like a Black Swan Event. The COVID-19 pandemic of 2020 is a great example. For these costs, usually the best you can do is have a contingency line-item in your cost estimate. Hopefully the contingency is large enough to capture these impacts of one of these situations if they do occur.

It turns out that knowledge (or data) is only one part of a three-legged stool. To balance the proverbial stool, you need an understanding of the other two legs as well.

How Speed, Accuracy, and Data Influence Your Construction Estimate

Making a construction estimate is all about balancing tradeoffs, just like the construction of an actual building. When you build a structure, you have to find a balance of speed, quality, and cost. For creating an estimate, your balance is between speed, accuracy, and data.

You’ll find that as your project progresses through the project lifecycle from idea to concept to design to construction, you’ll shift how you balance the three estimating variables and which type of estimating technique you use.

To start, let’s explain those three estimating variables. Speed is how long you have to actually spend building the estimate, which may range from literally seconds to days. Accuracy is how close the estimate will likely be to the actual construction cost. And data is how much information about the project you’ll need to have in hand in order to complete the estimate.

At the early stages of a project, you just don’t have enough information to make a detailed estimate because the details are still being determined. For instance, you may conceptually know that you want three bedrooms, but have you already decided on specific cabinets or light fixtures? Probably not. In exchange for still having a lot of unmade decisions and an incomplete design, you’ll have to give up some accuracy in your estimate.

And if you’re just wanting to get a feel for the cost of a potential container project, you probably want to have an answer in minutes, not hours or days. Again, by having a quick estimate, you will be sacrificing a bit of accuracy.

Introducing the Three Types of Construction Estimates

Based on your understanding of the previous discussion about the variables that affect construction estimates, you’re ready to explore the three construction estimating methods. You can visually see how the different methods relate tradeoffs between speed, accuracy, and data requirements.

The three star points on the line are labeled with the three construction estimating methodologies. As we hinted at above, each technique comes with associated pros and cons. In the following sections, we’ll discuss each of these three estimating options in depth.

Understand that the accuracy scale on the y-axis only represents a rough guideline. It’s certainly possible that your estimate could be more or less accurate than the estimate method suggests depending on several factors. So again, use the range as an approximate guideline and NOT as an absolute rule.

Finally, none of these estimating techniques can incorporate costs that are outside the realm of construction, like the cost of buying land, purchasing home insurance, or getting bank financing. These and other independent costs should be manually added to the construction estimate afterward if necessary.

Getting Quick Answers with Rough Order of Magnitude Construction Estimates

The first cost estimating technique we’ll discuss, Rough Order of Magnitude (ROM) Estimates, is by far the simplest. It’s an example of a top-down estimation technique, meaning you only need a broad idea of the project with few details. It’s so easy to create a ROM estimate, in fact, that explaining it will take far longer than actually using it!

What is an Order of Magnitude?

To understand a ROM Estimate, you first need to understand what an Order of Magnitude is. It’s basically a mathematical concept of representing a number N in the form N = a x 10b, where 1 ≤ a < 10 and b is an integer that is the order of magnitude.

The primary point to take away here is that an order of magnitude gives you a way to systematically group numbers together within a range of values.

You’re probably wondering how all these exponents have anything to do with container cost estimating. We’re about to show you.

As you can probably infer from the above chart and discussion, a given order of magnitude ‘b’ can represent numbers N within a certain range. For instance, a ‘b’ of 4 could represent numbers between 10,000 and 99,999, while a ‘b’ of 5 could represent numbers between 100,000 and 999,999.

We could stop there, and provide estimates with these huge possible ranges of values, but for most purposes, these ranges are too large to be of much practical use. You need a little more accuracy than that to be useful for planning and decision making.

An industry-standard from the project management world is to have a ROM estimate be accurate to plus 50% or minus 50% of the estimated value. So if you were estimating the cost of an upcoming vacation, you might say that it is $1000 ± 50%, so $500 to $1500.

This is clearly still a pretty wide range given that the upper end of the estimate is 3x larger than the lower end (3 x 500 = 1500). But it’s a fast and easy way to get a rough idea of the cost, and much narrower than the orders of magnitude based on factors of 10 that we shared above. ROM estimates are sometimes called ballpark estimates because they can get you in the general vicinity of the right answer, but are far from exact.

Later when we discuss how to actually build a ROM estimate, you’ll see how to find the starting number you base the range on. But for now, let’s quickly introduce the next estimating type.

Factored Construction Estimates – Accounting for the Largest Influences

The factored cost estimate is one that requires a bit more time and data to create but results in an estimate that is more accurate and with less uncertainty. Factored estimates are another class of top-down estimating techniques, but in order to complete them, a slightly better understanding of the situation surrounding and affecting the project is required.

A factored estimate essentially takes the output of the ROM estimate, then modifies it based on several factors or adjustments that reflect a few of the most important details about the project. Each of these modifications either increase or decrease the value of the estimate by a small amount. Collectively, they iteratively drive the estimate closer and closer to a more accurate final value.

Can you use Factored Estimates with the Costs of Previous Container Projects? Usually Not…

Theoretically, you can build a factored estimate based on a comparative or analogous estimate, instead of a ROM estimate. In this case, you would find a container home similar to yours where you knew the construction cost, then adjust up or down for the differences between your project and theirs. The thought process here is that no building is entirely new, and instead is just an evolution of designs that have come before it.

However, basing a factored estimate on a comparative estimate requires a deep understanding of both the total construction costs as well as location, time, and project-specific issues that may affect your project and theirs differently. Unfortunately, this type of information is rarely available for privately-owned homes.

So while this technique can be useful for large, public entities or corporations with insight into dozens of their own projects, it isn’t especially applicable for individual homeowners. That’s why we’ll be basing our factored estimates on the output of ROM estimates instead.

Bottom-Up Estimates – Real Accuracy Means Getting Down in the Weeds

The last estimating technique we’ll share is simultaneous the most accurate, the most powerful, and the most complex. We don’t recommend using it until you have a good idea of the scope of your project. Once we explain how it works, you’ll understand why.

A bottom-up estimate is so-named because it starts at a low level and works up, instead of the reverse strategy used in the previous two estimating techniques. Now, we’re starting with questions like “how much does a window cost” or “how much would it cost to lay floor tile”.

In order to answer these types of detailed questions, you need to have at least a basic plan of your home prepared. Many of the cost line items depend on measurements and specific quantities as inputs.

The process after that is simple (at least theoretically): Methodically work your way through each area of the home and add up all the materials, equipment, and contractor labor involved. The end result of what will likely be hundreds of separate calculations is your bottom-up estimate.

The real trick is understanding how to logically break the project down into these smaller pieces and carefully add everything back up without overlooking, double-counting, or miscalculating. We’ll tell you how in our in-depth look at Bottom-Up Estimates later in this article.

How to Build an Order of Magnitude Estimate for your Container Home

In a previous section, we introduced the example of planning for the costs of a vacation. We said it conceivably might cost $1000 ± 50%, or $500 to $1500. This was based on the industry-standard accuracy for ROM estimates of plus or minus 50%.

A logical question would be, “Ok, but where did the $1000 come from?” It’s true that the ± 50% math is fairly simple, but you have to know the base number you’re multiplying by.

That’s where we come in. Based on our experience and work with numerous container home owners and builders, we can offer you the base numbers to use when building your estimate.

Some project management professionals might call our ROM estimates ‘parametric estimates’. A parametric estimate takes a unit rate and multiplies it by a number of units. For our purposes here, we’ll give you a unit rate (estimated home cost per container) and you’ll multiply it by the number of twenty-foot equivalent containers in your project.

We actually provide two different unit rate numbers or parameters: one for Do-It-Yourself (DIY) projects, and one for Builder or Do-It-For-Me (DIFM) projects. This is because the cost of labor and other contractor costs is so large that it deserves a completely separate estimate. And note that our unit rate numbers are based on Twenty-Foot Equivalent Units (TEUs), the standard unit used in the shipping container industry.

For a DIY container home, estimate $10k ± 50% ($5,000 to $15,000) per TEU

For a DIFM container home, estimate $35k ± 50% ($17,500 to $52,500) per TEU

As we explained above, you’ll have to multiply these unit rates by the number of equivalent TEUs in your project to get the overall cost range. So if your home is built with one 40ft and one 20ft container and you’re hiring a builder, multiply the second bullet by 3 to get a cost of $105,000 ± 50% ($52,500 to $157,500). If your home uses four 40ft containers and you’re building it yourself, multiple the first bullet by 8 to get a cost of $80,000 ± 50% ($50,000 to $120,000).

You might be noticing that the ROM estimate fails to take into account a lot of variables. That’s true and by design. That’s why it is best used at the very early stages of your project. If you’re looking for a bit more accuracy without a huge amount of additional time required, you’ll appreciate factored estimates.

How to Create and Use a Factored Estimate for your Container Home

The most important parts of the factored estimate are the handful of actual factors you use to modify the base ROM estimate. Associated with each factor is a numerical value to which the total cost is multiplied.

A factor value of ‘1’ (or equivalently, 100%) means this factor doesn’t modify the price. Values below 1 decrease the total cost while values above 1 raise it. At Discover Containers, we’ve chosen specific factor values based on our knowledge of container construction projects.

Below, we’ll list the factors along with a short description.

Number of TEUs: Just like with the ROM estimate, the principal driver of cost is size. Additionally, size also affects economies of scale – the larger your home, the less it typically costs on a per-TEU basis

Just like with the ROM estimate, the principal driver of cost is size. Additionally, size also affects economies of scale – the larger your home, the less it typically costs on a per-TEU basis Responsible Party: Hiring a contractor adds substantial cost to the project versus doing it yourself

Hiring a contractor adds substantial cost to the project versus doing it yourself Location Considerations: A qualitative assessment of the price of materials (and labor, if you’re using contractors) in your local area, along with potentially increased delivery and mobilization costs if you’re in a remote location

A qualitative assessment of the price of materials (and labor, if you’re using contractors) in your local area, along with potentially increased delivery and mobilization costs if you’re in a remote location Climate: A rating of the expected temperatures you’ll have to design around

A rating of the expected temperatures you’ll have to design around Government Approvals: More regulatory oversight will require more permitting fees, design modifications, and other cost impacts

More regulatory oversight will require more permitting fees, design modifications, and other cost impacts Site Complexity: A complex site will impact vehicle access, foundation design, etc.

A complex site will impact vehicle access, foundation design, etc. Design Efficiency & Complexity: The more irregular the design, the more costly

The more irregular the design, the more costly Build Quality: High-end materials and finishes will cost more

If you read through our discussion of the factors above and said to yourself, “Hey wait a second, where are the numbers? How can I make an estimate with just words,” don’t worry! We’ve actually combined all the numbers and calculations into an incredible, easy-to-use, FREE tool! No downloads and no waiting, we promise.

Click Here for our online Shipping Container Home Cost Calculator

Remember that with factored estimates, even though we’re feeding in more detail than the ROM estimate, this is still a somewhat rough estimate with many assumptions. There are situations and designs that could fall outside the upper and lower bounds of the factored estimate. If you think you need even more detail in your estimate (and a tighter band of variability around it), it’s time to learn about the bottom-up estimate.

How to Create a Bottom-Up Estimate for your Container Home

A bottom-up estimate begins from a completely different starting point than the other two estimates. For that reason, we need a different framework to work off of: a Work Breakdown Structure (WBS).

As our previous WBS article explained, a work breakdown structure subdivides a construction project into a hierarchical system of activities and systems. Far from just a thought experiment though, a WBS is the basis of our bottom-up estimate.

Essentially, you allocate costs to the lowest levels of the WBS as possible, meaning the project is broken in the smallest chunks possible. As you progress through each section of the WBS, add individual line items until you’ve covered all the major features of your proposed container home. For each line item, you must account for the costs of materials, tools/equipment, and labor if outsourced.

When the costs for all the individual line items and sections are summed, you have the total cost estimate for the home. Just like with the other estimate types, there is still a margin of error in the accuracy of the estimate (although the accuracy is much higher with a bottom-up estimate).

In the remaining portion of this section, we restate the Container Home Classification System that we introduced in our WBS article. For each category, we’ll provide our commentary on the specific costs that should be included in each section. Afterward, we’ll talk about how you can create your own Bottom-Up Estimate.

Foundation

The foundation is what ties your container to the ground and supports it from below. Most (though not all) foundations are built with concrete.

Common varieties of concrete foundations include pier, strip, and slab. Costs of the foundation include

the concrete itself

the formwork used to hold concrete while it sets

the steel reinforcement used to strengthen the concrete

the steel plates or other attachments used to fasten the container to the foundation

the labor and equipment needed to excavate the soil where the concrete will be placed

Shell

The shell is inclusive of the containers themselves along with their external modifications. It’s broken up into three sub-sections shown below.

Superstructure

The first part of the shell is the Superstructure. This is where you allocate costs for the empty shipping containers you purchase, including delivery and offloading costs.

The Superstructure section also includes structural modifications you make the containers’ walls, floors, and roof, including:

Structural repairs and refurbishment of heavily-used containers

Cuts in the containers’ corrugated metal skin for room openings, windows, and doors

Work related to vertical stacking containers

Work related to horizontally connecting containers

Work related to building a bridged gap between two parallel containers

Structural support for secondary roofs above the built-in roof of the container, if desired

Structural support for balconies, canopies, roof decks, and other amenities

Any external staircases or ladders used to access other levels of the home

Vertical Enclosure

The vertical enclosure is the second section of the shell. This is where all non-structural modifications to the container walls typically go. These are elements that help with the appearance or performance of the container home.

Exterior Walls

The container itself, as described in the superstructure section, already has built-in exterior walls. This section is for non-structure modifications to those walls.

If you insulate on the exterior side of the container, that would be accounted for here. In addition, any external cladding (like stucco, wood, etc.) or coatings (special paint or cool-roof coatings) would go here as well.

Exterior Windows

This section is where you would account for all windows on the exterior of the home. Note that any structural framing to help support the windows would go in the superstructure section.

Exterior Doors

This section is where you would account for all doors on the exterior of the home. Note that any structural framing to help support the doors would go in the superstructure section.

Horizontal Enclosure

The last section of the shell is the horizontal enclosure, including the roof and floor. We previously mentioned that any roofing structural additions would go in the superstructure section.

Roofing

The roofing section is for any actual roofing materials at the surface layer. If you’re building a secondary roof, that might be items like shingles or sheet metal. If you’re using the container’s existing roof, cool roof coatings would go here as well.

For those who choose to insulate above the existing roof of their containers (and below a secondary roof), their exterior insulation would go here. Additionally, if you choose to use roof-mounted solar panels, they would go here as well.

Finally, any flashing, gutters, and other rain-water and sealing materials round out the roofing section.

Flooring

This section is where any external, non-structural modifications to the container flooring would go. An example of this would be under-container insulation.

Interiors

The interior of the home is where you spend most of your time living and building. It’s broken up into three sub-sections shown below.

Interior Construction

Interior construction covers most of the tasks related to turning a container from an empty shell into something resembling the skeleton of a house. Common interior construction elements include:

Wall framing (both along the perimeter of the inside of your container, as well as intermediate walls)

Interior insulation between the container metal skin and the interior wall and ceiling surfaces (polyurethane spray foam is what we typically recommend)

Subflooring and floor insulation placed above the container’s plywood floor, inside the envelope of the home

Interior doors between adjoining rooms

Built-in shelves, cabinets, countertops, etc.

Stairs

If you have a multi-level home, this is where you would account for interior staircases including railings, landings, etc.

Interior Finishes

Interior finishes are the materials and surfaces you actually see and touch as you use the home. This sub-section includes:

Interior wall and ceiling surfaces such as drywall, wood paneling, tile, etc.

Paint, wallpaper, and other wall surface coatings

Flooring including carpet, tile, and even epoxy coatings for the existing container plywood floors

Trim, molding, and other similar architectural features

Services

Services are the ‘modern’ conveniences that make a home more livable. Each of the four sub-sections is pretty self-explanatory, but we’ll give examples of line-items within each one.

Plumbing

Plumbing including everything associated with the distribution of water, sanitary waste, and gas. Examples include:

Fixtures such as showers, toilets, sinks, etc.

Equipment like valves, hot water heaters, etc.

All pipes and fittings

HVAC

HVAC is equipment and associated items related to making the interior environment more temperate. Examples include:

Permanently installed Heating, Ventilation, and Air Conditioning equipment (things like portable heaters and dehumidifiers wouldn’t typically be included)

Related ductwork unless using split-units

Boilers, radiators, and radiant-flooring related materials

Fire Protection

For most residential applications, this section will only include things like smoke and carbon monoxide detectors. However, some larger homes or commercial applications may include fire sprinklers as well.

Electrical

The electrical sub-section includes everything related to transmitting electrical power for devices and equipment around the house. It also includes other types of low-voltage systems as explained below. Examples include:

Electrical panels and wiring to distribute electrical power

Accommodations for off-grid operations (batteries, controllers, etc.) if desired

Switches, sockets, and other accessories

Interior lighting fixtures

Equipment, wiring, and terminations for low-voltage applications like TV, network, speakers, security systems, etc.

Furnishings & Fixed Equipment

Furnishings and fixed-equipment is a bit of a catch-all for large pieces of permanent and semi-permanent equipment. These are the kinds of things you would at least consider leaving with a home after a sale. Examples include:

Kitchen equipment like refrigerators, dishwashers, ovens, and cooktops

Laundry equipment like clothes washers and clothes dryers

Custom-made built-in furniture like tables, couches, and desks

Sitework

The site work section is towards the end of the estimate, but it includes some of the earliest and most important activities you’ll undertake in a container home construction project. Below we’ll discuss the four sub-sections.

Site Preparation

Site preparation is the activities involved in transforming newly purchased land into a building site. Examples include:

Land clearing and plant removal

Demolition of existing structures and other man-made obstacles

Grading, filling, and compaction of the building site as needed

Site Improvements

Site improvements are items that may take place before, concurrently, or after the actual home construction and help to improve the appearance and usability of the building site. Examples include:

Roads, walkways, and other pedestrian or vehicular access paths

Privacy, security, and animal fencing

Recreational amenities not attached to the home like pools, gazebos, fire pits, etc.

Landscaping including grass, flowerbeds, shrubs, trees, etc.

Mechanical Utilities

Mechanical utilities provide inputs to the non-electrical services covered in the Services section above. This includes everything to take you from the termination point of the utility company to the hookup at your home. If you’re providing your own service (for example, septic versus city sewer), the entire system is included. Examples include:

Water system tie-in or well and pump equipment

Sanitary sewer or septic

Gas tie-in or tank

Electrical Utilities

Electrical utilities include everything related to getting electrical power into your home, as well as exterior uses of that power. Examples include:

Electrical utility hookup, or wiring to solar panels, wind turbines, etc.

Emergency generators, if applicable

Exterior lighting and security infrastructure

General

General is the last major section and typically includes activities that are outside the scope of physical construction but are nonetheless still very important. Many of the specific line-items in the section typically apply only if you’re using a builder, and thus would pass-through to use as a buyer. If you’re a DIYer, some of the costs may not apply. The two sub-sections below give more detail.

Taxes, Permits, Insurance, and Bonds

This sub-section includes costs that are mandated by your local governing authority in order to be in compliance with regulations. Examples include:

Specific one-time construction-related taxes, pass-through sales taxes from a building contractor in some instances, etc.

Construction permit and approval fees from the local governing authority

Liability insurance, performance bonds, and related guarantees from a building contractor

Fees and Contingencies

The fees and contingencies sub-section relates to both fees paid to outside consultants as well as contingency fees. Examples include:

Architectural design fees

Engineering fees for things like surveys, geotechnical reports, structural designs, and storm-water planning

Design/Engineering contingencies to account for unforeseen/unplanned design changes

Construction contingencies to account for unforeseen/unplanned construction changes and to de-risk the accuracy of the estimate

Overhead and profit for the building contractor, if applicable.

This detailed description of the contents of a bottom-up design assumes you have the tools, skills, and experience necessary to actually build a detailed estimate using this technique. However, we recognize that this is a daunting task for many of you.

Later this year, we’ll be adding a detailed bottom-up estimate template to our store that will closely interface with our Project Planner. Interested in being notified when the template is available? Join our email newsletter and we’ll notify you when we release it!

Click the ‘Newsletter + Free Cheat Sheets‘ link at the very bottom of the page, in the Connect section, to subscribe!

After the Estimate, What Comes Next?

If you’ve finished building an estimate using one of the three methods we’ve described, you may be wondering what you need to do next. Below we’ll share a few actions you should take after you complete your estimate and before moving onto other tasks.

Verify Your Estimate

Every estimate needs to have a quick sanity check applied. This ensures the estimate isn’t completely off base and unusable. Whether through data entry error or just bad assumptions, it’s easy to accidentally end up with an estimate that is way off of realistic values.

To do a sanity check, you need to compare your estimate to something else. Examples include:

Comparing the results of other estimate types

Comparing your estimate to those created by friends/relatives

Comparing your estimate to the costs of other container homes you’ve seen

Running your estimate by someone experienced with building

Save Information about Your Estimate

If your estimate passes the sanity check, you know it’s at least worth considering as a starting point. So the next step is actually saving your estimate.

An estimate is only as good as its inputs, so you have to record the inputs you used to make it. Additionally, any you have on WHY you chose those inputs is helpful.

Right about now, you’re probably thinking that you’ll remember these details and don’t need to write them down. Trust us, you won’t.

As the days and weeks go by, details will slowly slip from your memory. But it’s likely you’ll want to go back and revisit an estimate as you iterate through your project, modify your design, incorporate changes in material prices and local regulations, and have additional funds become available.

Here are a few examples of information we recommend you record with your estimate:

The date you created the estimate

A description of the project, and any specific changes to it from the last estimate

The specific inputs you entered to create the estimate, along with a description and reasoning for each as appropriate

Update Your Estimate with New Ideas and Information

The last step after you save the estimate is updating it. Updates may be necessary due to external or internal changes.

An external change would be something like the price of wood or concrete dramatically falling. It’s outside your control and not something you decide on.

An internal change is something like moving from four small windows to two large ones. It’s a change you wanted for reasons of appearance, ease of construction, cost, etc.

As you think about internal changes you have some control over, a natural next step is to seek to reduce the estimated cost of your project. That is what Value Engineering is all about.

How Value Engineering Can Help You Save Money

Value engineering, sometimes also referred to as cost engineering, is the pursuit of achieving balance in speed, quality, and cost. We mentioned these toward the beginning of this article as the three ways you must balance tradeoffs when building a structure.

When you actively try to get that balance, you’re engaging in value engineering. The aim is to substitute materials and construction methods that reduce costs without reducing functionality, or less commonly, to increase functionality at the same cost.

Up to this point in the article, we’ve only been considering costs directly related to construction. But when pursuing value engineering, you need a much wider lens.

We’re talking about things like lifecycle costs (including operation and maintenance of the structure as well as eventual repair and even demolition/replacement), energy costs, and even ‘costs’ to your reputation in the community. We’re not saying you need to spend a lot of time estimating these new costs, but rather, to keep their existence in your mind as you think about value engineering.

With that understanding, let’s go over some examples of value engineering, many of which consider lifecycle costs:

Changing to standard-sized materials (windows, doors, sinks, cabinets, etc.) when you realize you’ve actually specified more expensive, custom sizes

Changing to a more expensive flooring material that will last longer before replacement and actually have a lower cost over time

Changing to higher-performance insulation that will reduce energy costs over the life of the home

You’ll have to consider your use case, site-specific factors, and other issues unique to your project to find the right balance in the value engineering process. But the important thing is to approach it with an open mind, and you may just find some impressive savings!

Summary

If you’re thinking this article is extremely detailed, we’ve barely even scratched the surface on what could be said about cost estimating. However, we hope we’ve given you enough information to understand the importance of container project cost estimating and how it should be done.

Each of the three cost estimating types we covered has its own pros, cons, and applicability depending on where you are in your project timeline. But each of them, in their own way, will be very helpful as you navigate the path of container home ownership.

Let us know your experience with cost estimating in the comments below.