Reschecks are affected by many things outside of our control. In recent years price inflation on almost everything has become more common. In today's episode of the Reschexpert blog we want to discuss with you 5 ways that your Rescheck energy report might be affected by inflation.
These 5 ways that inflation affects your Rescheck include, but are not limited to the following:
Price of construction materials
Cost of living
Rising price of oil
Increasing interest rates on construction loans
The cost of a Rescheck
Read along as we discuss each of the following items in another Rescheck blog post by www.Rescheck.info.
5 Ways Inflation Affects Your Rescheck
Today on the Reschexpert blogs we want to talk about ways the Rescheck reporting is affected by inflation. When prices rise on the goods that people use everyday one of the first places that is seen in the construction of new homes, alterations, and additions. The cost increases in all other goods are eventually reflected in the prices of construction, and that seems to happen sooner than later. Today on the Reschexpert blog, I want to discuss how inflation over the past several years has affected Rescheck reporting. Many do it yourself Rescheck creators, contractors, Rescheck services, architects, and engineers read this blog and they are no doubt affected as well so this blog post should reflect exactly what they are seeing, or will see on a daily basis in today’s construction market.
When the price of construction materials rise, sometimes one of the first things that you see is for a need to find alternative materials to construct a home with. Rescheck Web and Rescheck Desktop are unique softwares, because they allow all the components of a home’s insulation envelope to be viewed as a system. This system is then compared to the climate zone where a home is being built, and a pass or fail score is generated based on how well the new home’s insulation will perform in that area. One thing that we have seen quite often is homeowners, contractors, architects, engineers, and subcontractors is asking for different ways to insulate a home to save money on construction.
Here is an example: A homeowner submits a new home construction blueprint for Rescheck. The Architect has specified that they would like to use R49 roof and R21 wall insulation. The windows have a U value of .25. In today’s construction market this would rank as one of the top insulation packages that we see on Reschecks on a daily basis. The homeowner then asks if R value R38 roof and R value R 19 wall insulation will pass. We would run the calculation and let them know the score, and let the key players in the construction project make the decision as to what final insulation values they use, as long as they pass. It should be noted that you would save some material and possible insulation costs up front by using R 38 insulation instead of R49, and using R19 insulation instead of R21. However, the long term cost would benefit you by using the R49 and R21 insulation combination, because every month when you open your energy bill to heat and cool your home you might save $15-$25 using the higher amounts of insulation. This does not seem like much, but it adds up to $300 savings per year, $3000 per decade, and $6000 over 20 years. This is known as the payback period for insulation so carefully evaluate any cost savings that are presented by cutting the amount of insulation and weigh them against other luxury items. You might be able to cut the live waterfall from your living room to save on your budget instead of shrinking the amount of insulation protection your home has against your local climate zone.
Food and meals are also an important staple that construction crews and everyone involved in your construction need to stay nourished and have the energy to complete the tasks on your construction project. As the price of food rises, so does the cost of Per Diem payments for construction crews, drinks to fill coolers on hot summer days, and basic lunches at the gas station nearest the jobsite. Basic nutrition is a need that must be met first for anyone on a daily basis. As the price of meals rises, this will also eventually be added to the cost of construction. Anything added to the cost of construction will eventually come into contact with the Rescheck because these are the same people inspecting your home, installing your windows, and stapling in your batt insulation that is specified by your Rescheck.
The next item we see revolves around the oil markets. Diesel trucks, plastics, foam insulations, generators, and many other construction items directly use oil based products in their production. The cost of these items has doubled and tripled in the past few years. It is impossible to build a home for the same cost per square foot estimate as it was just 18 months ago. As the price of oil goes up from international conflicts, shortages, natural disasters, and other unforeseen events Rescheck reports are affected. Not to mention the on site inspections for Rescheck reporting that the building officials make each week or month to make sure that progress is taking place under the specified IECC Rescheck Codes. These will eventually be added to the price of building permits, because it costs more for even your building inspector to drive to jobsites.
Financing new construction is no easy task. A construction loan is extremely difficult because a majority of the financing products require two separate closings. You close on the loan one time before you break ground, and then you close on the loan a second time after you receive your certificate of occupancy. Each closing has a closing cost, and when you have 2 separate closing costs the up front cost of a construction loan may already be steeper than other loans that you are used to. Now add in the increased cost of interest rates. Interest rates have increased dramatically in an effort to tamper down inflation. While it may eventually make inflation decrease, the benefits have not been seen just yet. What this means is that you are already paying more for all the materials to build your home. You are also paying more interest to finance the construction of your home. This means that interest and material costs of your home are both increasing simultaneously and affecting the Rescheck energy reports on almost all construction projects.
The next item we see is Inflation in Rescheck pricing. We charge $79 for any size Rescheck. We have slowly seen other Rescheck services switch to a more sneaky square footage based Rescheck pricing model, and we are sure this is due to inflation. An example of inflation affected Rescheck pricing would be someone advertising a low cost for a Rescheck. Then once you dive into the details of their pricing you realize that a normal size 2500 square foot home costs almost triple the $79 that Rescheck.info charges on every Rescheck. We have seen prices rise significantly for single family homes in regards to the pricing of actual Rescheck reports for almost all Rescheck providers using this square footage based “bait and switch” Rescheck pricing tactic. We still charge just $79 for a Rescheck, and can have it prepared in 4-6 hours. To get one started and dodge inflation on this portion of your construction project you can email your PDF plans, jobsite address, and square footage to firstname.lastname@example.org and we will get you taken care of.