Cost management is one of the most vital aspects of multifamily housing projects. Effective cost control practices ensure the project costs do not exceed the estimates by unreasonable margins. To achieve the objective, value engineering for multifamily housing plays an instrumental role, helping in planning and executing construction projects, while ensuring optimum returns for investors. Continuing the discussion, the blog post describes the importance of value engineering for multifamily housing and the procedures involved. Take a look.
Importance of Cost Management in Multifamily Projects
1. Cost Planning
Cost planning is the first step to cost control in which the physical resources required for executing the construction project are determined. This typically includes deciding the people, construction materials and equipment required, both in quality and quantity for a seamless execution of the project. The stage also aims at understanding the objective and needs of the project, and supplying solutions to address them efficiently.
Useful read – Cost Control in Multifamily Renovations
2. Cost Estimation
Estimating the cost is instrumental to the success of the construction project and generally, the stage involves submitting the preliminary costs required for successful completion of the project. After that, the proposed costs are reviewed by the construction manager, followed by identifying and addressing the discrepancies in the estimates. Cost estimation also helps construction managers in deciding the pre-construction budget, thereby serving as a reference point for production planning and control.
3. Cost Budgeting
After estimating the total cost, construction managers are left with the task of cost allocation, which is usually covered under budgeting. This stage in cost control allocates the cost to the labor, construction materials and equipment, but is also concerned with construction overheads. As the project cost is a function of time, the tentative timelines to execute the project are also decided under the budgeting step.
4. Cost Control
Cost control is a crucial component of value engineering as the stage brings down the project expenses. The process is practiced throughout the construction project to ensure the costs involved do not exceed the acceptable or agreed limits. Moreover, the stage is also concerned with suggesting alternatives to the existing construction technology or improving the quality of the materials and resources, without inflating the projected costs.
The Bottom Line
As long as the cost incurred and time required to execute different construction stages comply with the estimates, the project execution is under control. Any deviations from the agreed schedule or cost overruns have to be mitigated. If you are looking to deploy value engineering in your construction project, the experts at United Renovations Specialty Group can help. Our professionals have proven expertise on cost-control procedures and handling diverse multifamily projects. To learn more about our value engineering services, fill out our contact form or simply call 480.219.6743.