Research on Cost Control and Management of Real Estate Project Essay

This paper takes the represent ascendancy and the steering of factual body politic date as the object in research, and analyzes and studies applicable issues. By analyzing the live structure of hearty solid ground reflexion, this paper identifies problems in greet consider and focus of objective ground complex body damp at present. Along with the immobile culture of chinaw bes economy, the square estate industry has achieved wonderful successes, twist economical development signifi merchant shiptly, and contri exclusivelying a lot to Chinas economic development.Today, authoritative estate body structure assumes to a greater extent tasks. In 2008, 3,000 billion RMB enters real estate manifestation. The appeal understand and regular prudence of real estate edifice turns into the focus. erstwhile the construction appeal is out of hold back, it testament lead to a great pine away and will bring about more than pressures for property management in l ater. A nice cost control is important for the whole real estate construction put. To realize better cost control and management of real estate construction is important for todays harmonized society.The cost of real estate construction is composed of four agencys. The first part is the land cost, story for 30% of the replete(p) cost. It in the first place refers to cost for building land, green land, equipped facility land, and property management land. The second part is the construction institution cost, as the main body of real estate construction cost, accounting for 20%-50% of the total cost. Among the construction deftness cost, materials cost the most, accounting for 60% of construction installation cost. The third part is the cost for equipments and machines, accounting for 1%-3% of the total cost.This part is chiefly for meeting the needs of operations, management, and maintenance. The fourth part is other(a) cost, accounting for more than 15% of the total cost . It is difficult to control this part. It mainly includes the cost for investigation and design, the cost for shed supervision, and the cost for infrastructure. In special, the management cost usually surpasses the work out, which is the largest part that is steadfastly to control in real estate construction. The management cost is only accounting for 1% of the total cost. But the absolute list is large. It is easy for the construction company be more in management.At present, sincere problems exist in the cost control and management of real estate construction. For example, for close to real estate construction, the design is in front than the instruction of feasibility, which makes the later turn into useless. In play, several(prenominal) construction companies perform illegally, which makes the bidding lead to control drift cost well. The popularization of assigned subcontracts and various subcontracts pay heed as potential threats for project quality. The delay for project payment, especially for workers wages, is serious. Some projects drive out not manage the changes of designs. Construction companies fail to follow the designs completely, which whitethorn lead to larger costs for construction. Some construction companies punctuate on the control of quality and completion but fail to control the cost. only these activities make the cost of real estate construction out of control in China, which is harmful for the sustainable and healthy development of real estate industry.* Fail to view the Project ExactlyInvestment idea is performed at the very beginning, namely in the field of honor of feasibility. Present compilation of study of feasibility is lack of dilate. No effectual items to control the number of project. The estimation has a lower preciseness. Besides, the study of feasibility has no necessary investigation. Some potential geologic disasters can not be identify effectively, which leads to the rise of costs. Although some companies make details for implement, the effect is poor. In fellowship to establish the project, some companies may shorten the number of project and decrease costs.* The compilation of Project Budget Has Poor dependablenessAt the stage of design, the investigation is far from sufficient. Some fundamental materials for design be inexact. As a result, the design may be irrational and will be changed significantly in construction, which causes the poor dependability of reckon.* Working Drawing Budget is UnpracticalAt the operative drawing design stage, pile up the project budget according to the design. The working drawing budget is to calculate the cost of design. The rationality of working drawing budget is about how to organize the construction and how to telescope the design requirements by what kinds of methods, plus how to assign the construction cessation, and how to manage workers and machines under various seasons, according to scientific designs. All these tas ks argon supposed to be arranged by construction companies. For design companies, to compile the budget is unpractical.* Do not Follow prefatory Construction Procedures and Cannot Control hailsFor some projects, time is urgent. Therefore, the design is maybe imperfect. And the construction does not follow the basic procedures strictly. Sometimes, the study of feasibility turns into useless papers. As a result, the estimation and the budget cannot control the project cost effectively.* Contract is not Managed Well, peculiarly for Subcontracts and External WorkersSome real estate developers neglect to manage contracts. They do not follow the terms written in contracts strictly. Besides, some developers cannot calculate the cost of project quantities correctly. They are incapable of managing external workers effectively.* unorthodox Management and Many Changes for Project veritable estate developers cannot design properly and see to change the management methods. Or, the execution is weak. They can change the design as will. Then, the eggshell of project is change magnitude and the cost is rising.* The pay Structure is Unreasonable and Depends on mavin Financing Channel too Much, Which Contributes to the skip Of CostsAt present, the coin for real estate construction in China are mainly from domestic loans, international cash in hand, self-collected by construction companies, and other sources. Although financing ways are some and some are immature, limits are more. Sometimes, funds can not arrive in time. In order to insure the cognitive operation of project, the construction companies have to apply loans from banks. Therefore, a large proportion of construction funds are from banks as loans. And the credit period is long and cannot match with coronation return. The characteristics of real estate industry determine the lagged-behind investment return. One financing channel increases risks and costs, which leads to the accretion of loan balance in banks, increasing construction costs and pressures for later in operation.* Cost Management is Unscientific. pretermit the inclination of Cost Control. System is Imperfect. Management Cost Is HighBy auditing lots of projects, we move up that management is one of factors that cause overspending. main items that cause overspending include management fees, compensation fees for removing, and supervision. Main reasons include Lack a perfect cost control trunk and cannot manage and control the cost outlineatically, which makes it hard to identify the out-of-control of cost in time. Lack the idea of cost control and the modesty mechanism. Project managers are always focusing on quality and construction period, but not cost control. The absence of system makes the expenditure more irregular. No combine standards for management fee are effective. Workers are more than necessary in construction companies.