The real estate business deals with the sale and purchase of the land. The focus should be given on the cost of equity and cash reserves for the calculation of the real cost of the property. The development of the feasibility report helps in completing the project within the given time frame.
The given project is about the real estate business which is looking forward to construct a duplex residential building in the regional centre of the state. The size of the land should be allotted according to the land required to construct a duplex residential building. The price of the land should be fixed according to the affordability of the customers.
The aim of this project is to develop a feasibility report for analysing the return on equity by analysing the value of duplex cost with the rent collected from tenants. The purpose of the project is to focus on the project schedule to complete the project within the given timeline.
The objectives of the given project are as follows:
|
Cost |
Values ($) |
|
Excavators |
1200 |
|
Road rollers |
1200 |
|
Mixer |
1000 |
|
Cement mixers |
1000 |
|
Loader |
1200 |
|
Trucks |
1200 |
|
Crane |
1200 |
|
Crawler |
1800 |
|
Compactor |
1800 |
|
Water sprinkler machine |
1250 |
|
Bricks |
2450 |
|
Concrete |
2234 |
|
Cement |
1247 |
|
Iron |
2232 |
|
Aluminium |
1234 |
|
Steel |
2600 |
|
Labour |
3000 |
|
Architect |
5000 |
|
Dealer |
5000 |
|
Construction engineer |
10000 |
|
System analyst |
10000 |
|
Project Manager |
15000 |
|
Total Cost |
72847 |
|
Delivery of the project within the approved timeline Delivery of the project within the approved cost and budget Analysis of the risks associated with the project Synchronization of the project activities and allocation of time duration Variation in the estimated cost of the project with the actual cost received |
|
The goals of the project is to develop a feasibility report on analysing the: Economic feasibility of the proposed real estate project Analysis of the global competition Factors responsible for the resource management Analysis of the timeline and business activities Analysis of the technical expertise Voice of customers |
The economic feasibility helps in analysing the financial stability of the real estate proposed project for building a duplex residential building. The development of the cost estimation plan helps in developing a cost variation report for analysing the difference in the value of the building and the rent received from the tenants. It helps in analysing the long term stability of the proposed project. The decision making skills and expertise of the manager will also get enhanced by providing the accurate report of financial status of the firm. The economic feasibility helps in focusing on the following:
The development of the cost benefit ratio helps in analysing the value of the duplex cost. The analysis of the return on equity helps in increasing the efficiency of optimising the cost of the duplex residential building. The emphasis should be given on increasing the return on equity by increasing the value of the rent received from the tenants. The extra cost paid to the agents and dealers should be minimised for enhancing the value of the property. It helps in increasing the profitability of constructing the sailing the duplex to the tenants. The measurement of return on investment helps in analysing the actual cost of the project. The cost spent on constructing the duplex should be taken into consideration for fixing the value of rent to the tenants (Monappa, 2017). The value of rent should be affordable so that it helps in increasing the sale of the property. The feasibility of the property can be measured by the lowest price paid by the tenants.
The competitive feasibility helps in analysing the global competitors of the real estate project. The new and innovated features should be associated with the proposed project so as to remain ahead of the global competitors which helps in increasing the sale of the property (Kang, 2010). The focus should be given on the following:
The success of the project depends upon the availability of the resources. The effective and efficient management of the resources at the construction site helps in completing the project within the allocated time and cost (Halil, Nasir, Hassan, Shukur, 2016). The availability of the resources depends upon the following:
The development of the residential duplex building depends upon the demographic factors. The demographic factors can be categorised as
Location of the residential building: The development of the residential building is going to be constructed in the regional areas of the state (Upadhyay, Gupta, and Pandey, 2016). The success of the project depends upon the availability of the market, hospitals, schools, transportation, and others from the site of residential building.
People and the nature of tenants: The behaviour of the people should be analysed and judged to retrieve the information regarding the affordability of the price (Prasad, Reddy, Kumar, Reddy, 2012). It helps in fixing the amount of price which the tenant has to pay.
Language and the cultural difference: The differences in the language and culture helps in predicting the background of the people living in the location near the residential building.
Population: The analysis of the population helps in analysing the probability of the sale of the property because the increase number of population increases the probability of sale of property.
The micro environment factors which are responsible for increasing the sale of the residential duplex building are discussed below:
The effective and efficient design of the duplex building can be constructed on the skills and talents of technical and internal expertise of the working team involved in developing the design. The training and development program should be arranged for the working employees to enhance their capability to develop a well-organized duplex residential building design. The quality of service should be provided to the customers so that the sale of the property can be increased to an high extent (Mansfield community, 2013). The technical feasibility helps in analysing the demand of the current requirement of the residential building design. The drawbacks of the previous building should be summarised to develop an effective design. The manpower should be employed according to the working plan of the construction of residential building (LLveskoski, 2014). The existing problems of the customers should be analysed so that the project can effectively satisfy the demand of the consumers and results in the increase of return on equity.
The construction activities of the project should be designed according to the time allocated to every activity. The duration of the activities helps in completing the project within the proposed deadline of project plan (Kharaiweish, 2013). It is the key responsibility of the project manager to allocate sufficient amount of time to complete the given task because the short duration of time to complete the proposed activity can result in the failure of the project.
The major component to analyse the feasibility of the construction project is the voice of customers. The level of satisfaction and the quality of service they are looking forward to be achieved in the dream house (Firmanzyah, Veronika, and Trigunarsyah, 2016). The expectation and the desire of the customers should be judged before designing the construction plan of the project. The matrix should be prepared to analyse the need and requirement of the customers which are required to be implemented in the construction of the duplex house.
|
Need |
Desire |
|
Kitchen |
LED Lights fitting |
|
Bathroom |
Wooden floor |
|
Sanitary fitting |
Furnished |
|
Living room |
Wall doors |
|
Bed room |
Modular Kitchen |
|
Dining room |
|
|
Guest room |
|
Risks Identification |
Risks Severity |
Risks Likelihood |
Risks Ranking |
Risks Impact |
Risk mitigation strategic plan |
|
Unavailability of resources |
3 |
2 |
5 |
Medium |
The effective communication plan should be developed for systematic synchronisation of demand and supply at the construction location |
|
Distribution of work |
4 |
4 |
8 |
High |
The level of job satisfaction should be tested so that the work efficiency of the employees can be enhanced which helps in completing the project within given duration of time (Patanakul, 2010) |
|
Voice of customer |
1 |
2 |
3 |
Low |
The face to face meetings should be arranged to analyse the change in requirement specification plan which helps in satisfying the customer requirement (Muller, and Oppe, 2012). |
Conclusion
It can be concluded that the price of the land should be fixed according to the affordability of the customers and return on equity. The development of the cost estimation plan for analysing the return on equity by comparing the value of the duplex with the rent received from tenants. The effective and efficient management of the resources at the construction site helps in completing the project within the allocated time and cost. The reserve cash flow for the proposed project is around $ 800000. The proposed project of developing a residential duplex is completed within the cost of $ 720000. The quality of service should be provided to the customers so that the sale of the property can be increased to a high extent. The technical feasibility helps in analysing the demand of the current requirement of the residential building design. The new and innovated features should be associated with the proposed project so as to remain ahead of the global competitors which helps in increasing the sale of the property. The effective communication plan should be developed for systematic synchronisation of demand and supply at the construction location to develop the project within the allocated time.
References:
Firmanzyah, B., Veronika, A., and Trigunarsyah, B. (2016). Risk analysis in feasibility study of building construction project. International journal of structural engineering and construction, 3(5). Available at: https://eprints.qut.edu.au/6551/1/Trigunarsyah_EASEC_10_5.pdf [Accessed on 30 Aug, 2018]
Halil, F., Nasir, N., Hassan, A., Shukur, A. (2016). Feasibility study and economic assessment in green building projects, 222(2016). International journal of social and behavioural science. Available at: https://core.ac.uk/download/pdf/82616822.pdf [Accessed on 30 Aug, 2018]
Hyari, K, and Kandil, A. (2009). Validity of feasibilities studies for infrastructure construction projects. International journal of civil engineering, 3(1). Available at: https://pdfs.semanticscholar.org/90e4/d6cf49e287b6b6bb3d0c091f7e85a4aecf5c.pdf [Accessed on 30 Aug, 2018]
Kang, B. (2010). Research support building and infrastructure modernization. Ebook [Online]. Available at: https://www-ssrl.slac.stanford.edu/lcls/reviews/rsb_project/2009_rsb_may18-19/supporting_docs/rsb_risk_management_plan.pdf[Accessed on 30 Aug, 2018]
Kharaiweish, M. (2013). Project Monitoring and control measures. International Journal of computer science and information technology, 5(5). Available at: https://airccse.org/journal/jcsit/5513ijcsit03.pdf[Accessed on 30 Aug, 2018]
LLveskoski, O. (2014). Building construction. Ebook [Online]. Available at: https://www.theseus.fi/bitstream/handle/10024/82098/HAMK_Building_construction_2014_ekirja.pdf?sequence=1[Accessed on 30 Aug, 2018]
Mansfield Community. (2013). Introduction to project management. Ebook [Online]. Available at: https://www.mansfield.vic.gov.au/Libraries/Community_Development/Intro_to_Project_Management_Manual.sflb.ashx [Accessed on 30 Aug, 2018]
Merrit, F., and Ricketts, J. (2012). Building design and construction handbook. Ebook [Online]. Available at: https://www.uop.edu.jo/download/research/members/[Architecture_Ebook]_Building_Design_and_Construction_Handbook.pdf[Accessed on 30 Aug, 2018]
Monnappa. (2017). Project scope management: What it is and why it is important. Ebook [Online]. Available at: https://www.simplilearn.com/project-scope-management-importance-rar89-article [Accessed on 30 Aug, 2018]
Muller, C., Oppe, M. (2012). Conceptual design and design examples for multi-storey buildings. Ebook [Online]. Available at: https://eurocodes.jrc.ec.europa.eu/doc/WS2008/EN1993_6_Mueller.pdf[Accessed on 30 Aug, 2018]
Otieno, F. (2014). The role of monitoring and evaluation in projects. Ebook [Online]. Available at: https://www.irbnet.de/daten/iconda/CIB8942.pdf [Accessed on 30 Aug, 2018]
Patanakul, P. (2010). An Empirical study on the use of project management tools and techniques across project life cycle and their impact on project success. Ebook [Online]. Available at: https://www.researchgate.net/publication/260059419_An_Empirical_Study_on_the_use_of_Project_Management_Tools_and_Techniques_across_Project_Life-Cycle_and_their_Impact_on_Project_Success[Accessed on 30 Aug, 2018]
Prasad, H., Reddy, P., Kumar, S., Reddy, S. (2012). A project report on analysis and design of multi-storey residential building. Ebook [Online]. Available at: https://www.retawprojects.com/uploads/fyp-Multi_Storey_Residential_Building.pdf[Accessed on 30 Aug, 2018]
Raz, T., Shenhar, A., and Dvir, D. (2011). Risk Management, project success, and technological uncertainty. 1st ebook. Available at: https://www.researchgate.net/publication/227644860_Risk_Management_Project_Success_and_Technological_Uncertainty. [Accessed on 30 Aug, 2018]
Upadhyay, A., Gupta, V., and Pandey, M. (2016). A case study on schedule delay analysis in construction projects. International journal of engineering and technology, 3(5). Available at: https://www.irjet.net/archives/V3/i5/IRJET-V3I5269.pdf [Accessed on 30 Aug, 2018]
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