Research on Cost Control and Management of Real Estate Project ...

Category: Managing,
Published: 07.10.2019 | Words: 1280 | Views: 383
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This kind of paper usually takes the cost control and the managing of property project while the object in research, and analyzes and studies relevant issues. By simply analyzing the fee structure of real estate development, this daily news identifies challenges in expense control and management of real estate development at present. Combined with the fast advancement China’s overall economy, the real estate industry has accomplished wonderful successes, pulling economic development drastically, and adding a lot to China’s economic development. Today, property construction presumes more tasks. In 2008, 3, 500 billion RMB enters real estate property construction.

The price control and regular administration of real estate property construction turns into the focus. Once the construction value is out of control, it is going to lead to an excellent waste and will bring about more pressures for property administration in afterwards. A nice cost control can be meaningful for the whole real estate structure project.

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To understand better expense control and management of real estate structure is important for today’s enlightening society. The price of real estate development is composed of four parts. The first portion is the terrain cost, accounting for thirty percent of the total cost.

It mainly refers to cost for building area, greening terrain, equipped service land, and property management land. The 2nd part is a construction set up cost, because the main physique of property construction expense, accounting to get 20%-50% of the total expense. Among the building installation price, materials expense the most, accounting for 60 per cent of structure installation price.

The third component is the expense for equipments and equipment, accounting for 1%-3% in the total cost. This component is mainly to get meeting the needs of operations, managing, and protection. The fourth part is other cost, accounting for more than 15% of the total cost. It is difficult to control this part.

This mainly involves the cost intended for investigation and design, the price for job supervision, as well as the cost for infrastructure. In special, the management expense usually surpasses the budget, which is the largest component that is hard to control in real estate construction. The managing cost is simply accounting for 1% from the total expense.

But the absolute amount is large. It truly is easy for the construction company costing more in management. At present, serious concerns exist inside the cost control and managing of real estate construction. For example , for some real estate construction, the style is earlier than the study of feasibility, which makes the later change into useless.

In bidding, a few construction businesses perform intend to, which makes the bidding fail to control job cost well. The popularization of assigned subcontracts and various subcontracts serve as potential threats to get project top quality. The hold off for project payment, specifically workers’ income, is severe.

Some tasks can not manage the changes of designs. Construction companies are not able to follow the patterns completely, that might lead to much larger costs pertaining to construction. A lot of construction corporations emphasize for the control of quality and period but do not control the price. All these actions make the expense of real estate construction out of control in China, which is harmful pertaining to the lasting and healthy development of real estate industry. * Fail to Estimate the Task Exactly: Expenditure estimation is conducted at the very beginning, namely inside the study of feasibility. Present compilation of study of feasibility is definitely lack of details.

No powerful items to control the number of project. The evaluation has a decrease preciseness. Besides, the study of feasibility has no important investigation.

Some potential geological disasters cannot be identified properly, which leads to the rise of costs. Even though some companies make “details to get implement”, the result is poor. In order to establish the job, some businesses may reduce the number of job and decrease costs. * The Compilation of Project Budget Has Poor Reliability: With the stage of design, the investigation can be far from adequate. Some fundamental materials for design will be inexact.

Because of this, the design could possibly be irrational and you will be changed substantially in development, which causes the indegent reliability of budget. 5. Working Sketching Budget is usually Unpractical: At the working drawing design stage, compile the project price range according to the style. The working sketching budget is always to calculate the cost of design. The rationality of working pulling budget is around how to coordinate the construction and the way to reach the design requirements with what kinds of methods, plus how to arrange the development period, and how to manage personnel and equipment under distinct seasons, in respect to scientific designs. All of these tasks are meant to be established by development companies.

For design businesses, to put together the budget is unpractical. 2. Do not Comply with Basic Building Procedures and Cannot Control Costs: For some projects, time is urgent. Therefore , the design is might be imperfect.

As well as the construction will not follow the simple procedures totally. Sometimes, study regarding feasibility turns into useless paperwork. As a result, the estimation as well as the budget cannot control the project cost effectively. * Contract is definitely not Managed Well, Especially for Subcontracts and External Employees: Some property developers are not able to manage agreements. They do not follow the terms created in contracts strictly. Besides, some designers cannot determine the cost of job quantities appropriately.

They are incapable of managing exterior workers successfully. * Irregular Management and Many Changes to get Project: Real estate property developers cannot design correctly and have to improve the supervision methods. Or perhaps, the execution is weak. They can replace the design because will. In that case, the scale of project is increasing plus the cost is growing. * The Financing Structure is Unreasonable and Depends upon One Auto financing Channel an excessive amount of, Which Leads to the Climb Of Costs: At present, the funds pertaining to real estate building in Cina are mainly coming from domestic loans, foreign cash, self-collected by simply construction firms, and other sources.

Although financing ways will be few and several are immature, limits are usually more. Sometimes, funds can not arrive in time. To be able to insure the project, the construction companies need to apply financial loans from banking companies. Therefore , a large percentage of00 construction funds are coming from banks as loans.

Plus the credit period is very long and simply cannot match with expense return. The characteristics of real-estate industry determine the lagged-behind investment returning. One financing channel raises risks and costs, that leads to the deposition of bank loan balance in banks, raising construction costs and stresses for later functioning. * Price Management is definitely Unscientific. Absence the Idea of Cost Control. Strategy is Imperfect.

Managing Cost Is Large: By auditing lots of jobs, we find that management can be one of elements that trigger overspending. Key items that trigger overspending consist of management charges, compensation service fees for removing, and direction. Main reasons consist of: Lack a perfect cost control system and cannot take care of and control the cost systematically, which makes it hard to identify the out-of-control of cost with time. Lack thinking about cost control and the restriction mechanism. Task managers are always focusing on top quality and development period, but not cost control.

The a shortage of system the actual expenditure even more irregular. No integrated criteria for supervision fee work well. Workers are usually more than required in development companies.