SOFT COST Meaning and
Definition
-
Soft costs refer to expenses that are not directly related to construction or physical materials in a project. These costs typically encompass various non-tangible aspects such as planning, design, permits, legal fees, administrative expenses, financing, and other indirect expenses that are necessary to complete a project. Soft costs are often associated with the initial stages of a project, prior to physical construction taking place.
Soft costs play a critical role in project development by facilitating the necessary groundwork and logistical preparations. Planning and design costs involve architectural and engineering services, such as creating blueprints and assessing feasibility. Permit costs encompass fees required to obtain regulatory approvals and licenses, while legal fees involve engaging legal professionals to ensure compliance with regulations and contractual agreements. Administrative expenses cover activities, such as project management, accounting, and insurance.
Financing costs refer to expenses associated with securing a loan or funding for the project, including interest payments and fees. Other soft costs may involve market research, environmental assessments, feasibility studies, and marketing expenses to determine the viability and potential profitability of a project.
Understanding and properly accounting for soft costs is essential for project budgeting and financial management. Failure to allocate sufficient funds for soft costs can lead to unexpected budget overruns or delays in completion.
Common Misspellings for SOFT COST
- aoft cost
- zoft cost
- xoft cost
- doft cost
- eoft cost
- woft cost
- sift cost
- skft cost
- slft cost
- spft cost
- s0ft cost
- s9ft cost
- sodt cost
- soct cost
- sovt cost
- sogt cost
- sott cost
- sort cost
- sofr cost
- soff cost
Etymology of SOFT COST
The term "soft cost" has an etymology based on its usage in the field of construction and project management.
The word "soft" in this context refers to intangible and non-physical elements that might be associated with a project. It is opposite to the term "hard", which refers to tangible and physical elements like materials and labor.
The term "cost" refers to the expenses or charges incurred during a project.
When combined, "soft cost" refers to the indirect expenses associated with a construction project that are not directly related to the physical construction itself. These costs typically include fees, permits, licenses, professional services, insurance, legal fees, marketing, and other administrative and overhead expenses.
The use of the term "soft cost" in construction and project management likely emerged to differentiate and classify expenses that are not directly tied to the physical construction process but are still necessary for the successful completion of a project.
Infographic
Add the infographic to your website:
