An investor estimate is a document that allows you to estimate the estimated cost of implementing a construction investment - even before construction begins. For the investor, this is one of the most important planning tools: it gives an overview of the total budget, organizes the scope of work and avoids financial surprises.

What does such an estimate include? Depending on the degree of detail, there may be:

  • lists of construction and installation works,
  • quantity of materials and expected labour,
  • unit prices and total values for each item,
  • breakdown into investment stages (e.g. raw state, closed, finishing),
  • total net and gross - broken down into materials, labor and equipment.

Why commission an investor estimate at all when we have a project? Because the design, even well prepared, does not say anything about prices. It contains drawings, technical solutions and materials - but does not show how much all this will cost. The investor estimate “converts the project into money” and gives a real picture of what lies ahead.

Is an investor estimate mandatory? Formally, no. But in practice it is often necessary:

  • when applying for a mortgage for the construction of a house,
  • when the investor wishes to organise a tender or compare the offers of contractors,
  • if it plans to implement in stages and needs to plan financial liquidity,
  • as a reference point for negotiation and cost control during construction.

It is worth adding that an investor estimate is not the same as a bid or executive estimate. They differ in purpose, degree of detail and moment of creation. The investor's estimate is usually prepared before the start of works, on the basis of a construction or executive project. The tender is created by the contractor as a response to the request, and the executive - as a tool for conducting works.

Does the bank require an investor estimate? In many cases, yes - especially with a construction- mortgage loan. This document allows the bank to assess whether the planned investment is within the established budget and the investor has a real financial plan.

How much does such a document cost? The price depends on the size of the building, the level of detail and the source documentation. This is an expense that is often paid back already at the tender stage - it allows you to compare offers “on the same terms” and avoid misunderstandings with contractors.

The more detailed the design, the more accurate the estimate. The most precise elaborations are made on the basis of an executive project, but even an earlier version - based on a construction project - gives the investor a lot of value. It facilitates decision making, budget management and distribution of payments over time.

Imagine: an investor starts construction without a cost estimate. After just a few weeks, it turns out that labor prices are higher than he assumed, and materials have risen. The budget ends before the roof appears. If he had an investor estimate beforehand, he would know what to expect and could adjust plans or seek savings where it is safe.

‍