Do you want to know what real estate project management is? Based on my personal experience, the real estate sector is huge. It includes many undertakings, each with many moving pieces, duties, resources, etc.
Almost any real estate initiative may be classified as a project. Every project requires the glue that holds it all together – a project manager.
This guide to real estate project management will cover topics such as what project management in real estate is, the benefits of real estate project management, common real estate project management issues, and much more.
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Now, let’s get started.
What Is Project Management In Real Estate
Project management has grown quickly in recent years, and many businesses, including the real estate industry, have integrated its techniques into their daily operations.
Project management was initially created for the building sector. It is the procedure for managing and balancing the project’s spending, time, and quality.
Project management guarantees that a real estate project proceeds without hiccups and produces all deliverables on schedule.
Real estate projects can have quite large scopes.
According to Statista data released in May 2022, residential building construction in the US takes an average of 7.2 months.
The project moves through several tasks, phases, resources, etc., throughout that period.
Before beginning a home-building project, for instance, you must decide on funding and location.
You still need to set a brick before you have to obtain all the required permissions and check to see whether the structure will violate any laws.
Once development has started, you’ll need to organize the laborers and materials required to complete the project; these parties must be scheduled and allocated accordingly.
Therefore, the need for a project manager is justified by the project’s size alone.
Some businesses focus just on managing real estate projects. Thus, while some businesses handle their real estate initiatives in-house, others employ seasoned experts focusing on that area.
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How Is Project Management Part Of Real Estate
When developing real estate, many processes and components are merged, such as financial analysis, urban and town planning, land and title administration, market research, land purchase, and negotiations. Project management has become a crucial component of real estate development as the sector grows.
In the modern real estate project, project managers are often used.
As projects get more complex and expectations grow, project managers are supposed to oversee and monitor the whole development process.
They are also in charge of managing and supervising the project’s financial goals.
Real estate project managers are in charge of creating and maintaining meaningful working relationships with all team members, stakeholders, and outside parties, such as funders, architects, consultants, construction managers, etc., in addition to their managerial responsibilities.
They should be distinguished from construction managers, who the building contractor usually employs to oversee the many operations on the construction site.
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What Are The Key Elements Of Real Estate Project Management
Time and scope management are the most important aspects of planning since they determine the size, location, and kind of property, as well as the actual project timeframe.
1. Cost control: This component entails several activities, including planning, estimating, budgeting, financing, funding, managing, controlling, and benchmarking. Cost management improves control, increases efficiency, and reduces risk.
2. Quality control: To maintain high standards, quality control procedures should be developed, as well as regular monitoring and modification of targets.
3. Risk management is the area where all forms of hazards are discussed. Legal risks, managerial risks, and investor risks, such as liquidity, should all be considered.
4. Communication management: As with any project, an established communication route, including project stakeholders, regulatory agencies, developers, contractors, and investors, is required.
5. Procurement management: To correctly execute the project, there should be a focus on purchasing services and materials required. Supply chain management and contract negotiation should be included.
6. Integration management: Because many individuals will be engaged in the project, a strategy for coordinating and integrating various components should be developed to guarantee that everything runs well.
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What Do Real Estate Project Management Companies Do
Numerous consulting businesses manage real estate projects in North America and abroad.
These companies frequently approach huge organizations for business since they specialize in real estate project management and have staff members in major cities who are familiar with the zoning, permits, and government building regulations in the area.
To monitor corporate real estate efforts and guarantee that the projects are finished on time and within budget, these organizations may put together teams of experts from inside or outside the organization. Project managers are then appointed.
When contemplating the recruitment of an external project manager, companies want to inquire about the following:
- What is the company’s project management methodology?
- Do employees of the company hold project management or other accreditations?
- What kinds of projects—new building, renovations, facility improvements for the entire franchise, projects about the environment or energy efficiency—has the company previously handled?
- Which industry or clientele does the company serve? Does the business have references from clients it could provide?
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What Are The Benefits Of Real Estate Project Management
Project management is a critical aspect in the real estate sector that may make or destroy an investment.
If done correctly, you may reap advantages that will benefit you in the long run.
Here are a few advantages of efficient real estate project management:
Improved project efficiency and effectiveness: Inefficiencies, incorrectly specified project scope, and inefficient plan details can all have a significant impact on real estate projects.
Project management, on the other hand, allows you to readily optimize techniques by breaking down the project into tiny, manageable tasks.
Better risk management: Project managers may limit these risks by adequate planning, insurance, contract oversight, and understanding of building rules.
Improved stakeholder communication and collaboration: Using a project management platform, you can simplify communication to make work delegation easier and keep everyone up to date, eventually leading to increased efficiency and effectiveness.
What Are The Different Processes Of Project Management
The many phases a project goes through are project management procedures.
The following is a discussion of the five phases of a project life cycle:
Step 1: Commencement
This is how a project begins. The team will carry out a feasibility assessment to ascertain whether the project is worthwhile after broadly outlining the aim.
A business case that justifies the project’s launch is created at the start phase.
Phase Two: Organizing
A project manager’s job during the planning phase is to determine the specifics of a project, such as its scope, duration, and cost, as well as how it will be handled, what supplies and labor are required, and
how the team will accomplish its goals.
During the planning phase, the PM also recognizes possible risks and creates backup strategies to handle each one if it materializes.
Step 3: Implementation
During the execution phase, the project completes the tasks required to complete the deliverables under the direction of the project manager.
To minimize or completely remove any risk, it is advisable to start a reaction strategy early on in the project.
Stage 4: Keeping an eye on and managing
Monitoring and evaluating the project’s performance is part of this step. If there are any deviations from the initial plan, corrective action must be taken to get the project back on track.
Step 5: Concluding
At this point, the PM formally closes the project as it is finished. After that, they give the purchaser the finished product.
Once the project data and documentation have been stored, the team may consider the lessons discovered throughout the project.
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Final Thought
Now that we have established What is real estate project management, also know that Real estate project management is vital for the effective development and construction of real estate projects.
For effective project management, a skilled team, careful planning, robust risk management, clear communication, and an agile approach to dealing with unanticipated developments are all required.
To ensure the project is completed on time and under budget, project managers must balance competing demands such as budgetary constraints, regulatory compliance, and tight deadlines.
Real estate project managers may help ensure a successful project conclusion by addressing common issues and taking a proactive approach to project management.