27 Aug Understanding Project Management for Residential Real Estate
When it comes to your home, what do hanging a picture and building a two-story addition have in common? They both require a plan, and that plan needs to be executed. Believe it or not, determining the weight of the picture, deciding on the (right) hanging mechanism to use, buying the materials (and maybe even a level), and completing the job take some forethought and organization, or you’ll end up at Lowe’s four times in one weekend, or hiring a drywall repair company to fix a large, unwanted hole. Now scale this up to a remodel, and you start to understand how important it is for someone involved to have critical organizational and execution skills when it comes to home improvement. Welcome to the world of project management.
WHAT IS PROJECT MANAGEMENT?
In construction, project management’s core function is integration, that is avoiding discrepancies between stakeholders, scope of work, specialized resources/trades, installation methods, time, costs and quality. After all, it doesn’t help to have the carpet installer arrive before the subfloor has been put in, and the electrical wiring installation in the kitchen has to be started behind the walls and then, in a second phase, the outlets need to be the right kind and fit for counter height, appliance location and code. Project management builds out a plan, including the sequencing and timing of trades. It can get even more complicated. And if something goes awry – like discovering some mold when a wall is opened – the entire process has to get shifted in a way that minimizes interruption by letting some work continue while managing the issues as they arise.
PROJECT MANAGEMENT SHOULD BE A CONCERN FROM THE START
The time to be concerned about how to put the project together should be before the project begins. For a homeowner, this means considering their own role in the project (i.e. where to cook and eat during a kitchen remodel, moving out, paying construction bills, etc.). You also should pay close attention to how the project is going to be managed. If using a general contractor, ask about their project management responsibilities and approach. Ensure you understand the contract clauses that address these complexities particularly delays and performance/completion requirements. Additionally, understand the contingencies the contractor may invoke to address these risks. The contract is the place to set expectations regarding timely communications, particularly of any changes.
Whether doing the work on your own, hiring a general contractor, or acting as your own “general” by interfacing directly with various trades, be sure to have a good project management plan in place. Hiring a professional to provide pre-construction advice and counsel is a great way to make sure the project doesn’t go off the rails. That expert can circle back periodically throughout the work and make sure that everything is proceeding as it should.
BEYOND THE REMODEL – PROJECT MANAGEMENT FOR OTHER REAL ESTATE ORIENTED BUSINESSES
The construction industry has invested a great deal of time and effort refining project management practices, which are now academic subjects that are researched and taught in higher education. The Strategic Execution Framework developed at Stanford University is an excellent example of a sophisticated approach to improving efficiencies and outcomes in projects. This framework isn’t limited to the construction project itself. It can be applied to Real Estate Brokers, Settlement and Title Companies and businesses attempting to align their organization to achieve their strategic imperatives.
Biller & Associates offers project management services custom designed for the needs of clients including homeowners and contractors. These services can also be adapted for use by other residential real estate businesses to optimize their processes. To learn more about project management services, contact us today.