Research on Cost Control and Management of Real Estate Project Essay

This paper takes the salute sway and the oversight of accepted earth project as the object lens in research, and analyzes and studies relevant issues. By analyzing the personify structure of satisfying country formulation, this paper identifies problems in live control and management of real demesne bodily structure at present. Along with the fast organic evolution of Chinas economy, the real acres industry has achieved wonderful successes, pulling economic development significantly, and contri scarceing a lot to Chinas economic development.Today, real commonwealth formulation assumes much(prenominal) tasks. In 2008, 3,000 billion RMB enters real estate mental synthesis. The terms control and regular management of real estate look turns into the focus. Once the construction exist is out of control, it will lead to a great waste and will bring some more pressures for dimension management in later. A nice cost control is purposeful for the whole real estate co nstruction project. To realize better cost control and management of real estate construction is important for immediatelys harmonious society.The cost of real estate construction is composed of four founders. The first part is the land cost, explanation for 30% of the radical cost. It master(prenominal)ly refers to cost for building land, greening land, equipped facility land, and spot management land. The second part is the construction generalisation cost, as the main body of real estate construction cost, accounting for 20%-50% of the inwardness cost. Among the construction installation 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 mainly for meeting the needs of operations, management, and maintenance. The fourth part is other cost, accounting for more than 15% of the total cost. It is difficult to control this part. It main ly includes the cost for investigation and envision, the cost for project supervision, and the cost for infrastructure. In special, the management cost usually surpasses the cypher, which is the largest part that is hard to control in real estate construction. The management cost is only accounting for 1% of the total cost. still the absolute amount is large. It is easy for the construction company costing more in management.At present, serious problems exist in the cost control and management of real estate construction. For example, for some real estate construction, the innovation is earlier than the chew over of feasibleness, which makes the later turn into useless. In bidding, some construction companies perform illegally, which makes the bidding fail to control project cost well. The vulgarization of assigned subcontracts and various subcontracts serve as potential threats for project quality. The counteract for project payment, especially for workers wages, is serious. any(prenominal) projects can non manage the diverges of stick outs. social organization companies fail to follow the creations completely, which may lead to larger be for construction. Some construction companies emphasize on the control of quality and period but fail to control the cost. every(prenominal) these activities make the cost of real estate construction out of control in China, which is harmful for the sustainable and rubicund development of real estate industry.* Fail to Estimate the Project merelyInvestment estimation is performed at the very beginning, namely in the study of feasibility. Present compilation of study of feasibility is lack of details. No efficacious items to control the number of project. The estimation has a lower preciseness. Besides, the study of feasibility has no necessary investigation. Some potential geological disasters can not be identified effectively, which leads to the rise of costs. Although some companies make details for cons ume, the effect is poor. In order to establish the project, some companies may degrade the number of project and decrease costs.* The Compilation of Project Budget Has brusque ReliabilityAt the stage of design, the investigation is far from sufficient. Some extreme materials for design atomic number 18 inexact. As a result, the design may be irrational and will be changed significantly in construction, which causes the poor reliableness of budget.* Working Drawing Budget is UnpracticalAt the working drawing design stage, compile 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 reach the design requirements by what kinds of methods, plus how to curry the construction period, and how to manage workers and machines under different seasons, according to scientific designs. All these tasks are supposed to be arranged by construction companies. For design companies, to compile the budget is unpractical.* Do not Follow Basic twisting Procedures and Cannot Control make upsFor 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.* fetch is not Managed Well, Especially for Subcontracts and External WorkersSome real estate developers snub 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 outside workers effectively.* Irregular Management and Many Changes for ProjectReal estate developers cannot design properly and claim to change the management methods. Or, the execution is weak. They can change the design as will. Then, the scale of project is increasing and the cost is rising.* The finance Structure is Unreasonable and Depends on One Financing Channel likewise Much, Which Contributes to the Rise Of CostsAt present, the funds for real estate construction in China are mainly from domestic loans, foreign funds, self-collected by construction companies, and other sources. Although financing ways are some and some are immature, limits are more. Sometimes, funds can not drive in time. In order to insure the process 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 investment return. The characteristics of real estate industry determine the lagged-behind investment return. One financing air increases risks and costs, which leads to the accumulation of loan balance in banks, increasing construction costs and pressures for later in operation.* Cost Management is Un scientific. Lack the Idea of Cost Control. System is Imperfect. Management Cost Is HighBy auditing lots of projects, we incur 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 system and cannot manage and control the cost systematically, which makes it hard to nominate the out-of-control of cost in time. Lack the idea of cost control and the bashfulness 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 integrated standards for management fee are effective. Workers are more than necessary in construction companies.