What Is Real Estate Cost Management?

Real estate cost management refers to the cost management and cost management of real estate projects, which is a subset of project management, including the process needed to ensure the completion of projects within approved budgets, which is composed of resource planning, cost estimation, cost budgeting and cost control.

[cost estimate]

Its input is WBS, resource demand, unit price of resources, activity duration estimation and account statement.

Resource demand is the output of resource planning, including three demands of manpower, material and equipment. The key is that these three needs correspond to the deliverables of work breakdown structure.

Unit price of resources is the local unit price of all kinds of resources needed for project development.

Such as steel X yuan / ton, artificial X yuan / day, feasibility study report XX 10000 yuan /, and so on.

Activity duration estimation: what activities are needed to accomplish a deliverable and how long each activity lasts.

Activity definition, activity sequencing and activity duration estimation are specifically carried out according to deliverables.

Statement of accounts: any coding system for classifying the cost of accounts, such as labor, daily necessities and materials.

It is based on the account list of developers.

With the above basic data, different methods are used to estimate the real estate development projects in different stages.

For example, in the feasibility study stage, a similar estimation method is adopted; the parameter model method is adopted in the planning stage and the planning positioning stage; and the word down and up estimation method is adopted in the construction stage.

Because of the different stages of estimation and the different methods used, the estimation has different accuracy and different time consumption.

This is determined according to the needs of the progress of the project.

Based on the above estimation results, we can draw the cost management plan, detailed basis and cost estimate.

Cost management plan: real estate development project from the feasibility stage to project planning orientation, planning plan design, construction drawing design, project construction, project acceptance and so on, the definition of the project is a gradual and detailed process, so the whole cost of the development project is also approaching the actual cost process. The cost management plan is the change of the real estate development project in the life cycle management cost of the project.

Detailed basis: assumptions and assumptions used in the estimation of development projects, hypothetical and hypothetical understanding are the compilation instructions or compilation bases that are often written by our traditional engineering budgets and schedule plans.

Completion of development activities requires quantitative estimation of the possible cost of resources.

With the continuous definition of project definition and the change of resource prices under market economy, the estimation is dynamic.

[cost budget]

The input of the cost budget is cost estimation, work breakdown structure (WBS) and project schedule plan.

Cost estimate: Previous introduction.

Work breakdown structure (WBS): the deliverables at all stages of the real estate development project. The WBS used here is consistent with the estimated WBS.

It is important to emphasize that, regardless of estimates or budgets, the nature of deliverables at different stages of development projects is consistent, not because of the different stages of the project in its life cycle, and its results are constantly changing.

In real estate development projects, this happens frequently. For example, in the feasibility study, a certain plot is defined as a middle grade residential development. In the stage of planning and positioning, it is defined as a traditional style high-end villas.

I do not think that this continuous change of deliverables is an improvement, but in fact it is a kind of mess.

The situation is that developers are not aware of the feasibility of the feasibility study, or developers in the early stage of work too low.

Like this continuously changing project deliverables, costs can not be budgeted.

Project schedule: according to the development rhythm of development projects, the schedule plan is compiled according to the time node of deliverables.

Based on the above input, the cost estimates are compiled by means of cost estimation analogous method, parameter model method, bottom-up estimation method and computer model.

That is, the cost estimate is allocated to all work, and it is matched with the progress plan at the same time, thus forming a cost baseline plan.

The cost baseline plan is approved by a certain procedure. If there is any change, it must be changed intermittently by cost change control system.

This ensures the seriousness of the cost baseline plan.

Based on this benchmark, the actual cost and planned cost of the subsequent development projects are compared, so that the cost performance and schedule performance of the project can be detected.

[cost control]

Its input is: cost baseline plan, performance report, change application and cost management plan.

Performance report: the state report, progress report and development trend of the development project during the actual development and operation.

There are many factors that lead to the change of project cost. The scope of development must be changed (increase or decrease), and the cost must be changed. The huge adjustment of time will lead to the change of cost. If a major accident occurs, the cost will be changed.

These cost changes must be adjusted through certain procedures for project estimates and project budgets.

Cost changes must be done in written form.

For the above cost changes, we must first deal with the application of change through a certain procedure to verify the reasonableness of the change, and the process of verification is performance measurement.

The measurement results do need to be changed, and the cost estimate should be recompiled. The method of compilation can be calculated by routine calculation or computer aided.

After the above process, we will come up with revised cost estimates and updated budgets.

In the execution of development projects, according to the actual cost that has been spent, according to the performance report of the project, the cost of the project can be predicted, and the estimate of the completion of the development project is made.

In the process of project implementation, the causes of cost changes should be thoroughly analyzed, and the cost can not be passively changed. According to the actual situation of the project and the financial situation of the enterprise itself, it is necessary to take corrective measures voluntarily, or adjust the scope or change the resource conditions, or re coordinate the three party relations of the progressive, cost and quality.