Is project management a DIY job?
When undertaking a development project, there comes a time to
decide upon whether you will manage the project yourself or employ a
professional. There’s no real easy
answer to this as the right choice in your circumstances will depend upon a
number of factors including the size of your development and your experience.
But choosing to do it yourself is more often than not a decision many investors,
particularly beginners, come to regret.
Project managing a development is no mean feat. There’s a whole
host of competing demands that need to be organised, decided upon, overseen, and
followed-up. There’s a level of expertise needed to know what order to do things
in, who is best for which job, and what needs to be purchased and when. And
that’s just the tip of the iceberg.
If you’re a pretty organised person, you may be tempted to tackle
this all yourself and save a few dollars. Couple this with a small development
of 1 or 2 units and some reasonable experience in the property game, and you’ll
probably do well. But if you’re managing anything more than a small development,
especially with little or no experience, the idea of saving a few dollars could
end up costing you more in the end. Choosing the DIY project management option
can end up costing you more because:
- Time
is lost from lack of knowledge of the correct scheduling of work and trades
and through not being able to obtain good trades quick
enough.
- Budget
is overspent from inaccurate estimating, using expensive retail-priced trades,
and choosing inappropriate products and quantities of
products.
- Work
is redone because poor trades have been chosen, workmanship hasn’t been
monitored, or allowances haven’t been made for other trades.
Remember, in property time is money so not being on-site almost
daily or resolving issues quick enough will hurt you dearly. And don’t kid
yourself that you’ll be able to balance family, work and the development.
Managing a development takes time and when you’ve got your life savings on the
line, you won’t want to be cutting any
corners.
Project managers work in the property industry and are very
familiar with all aspects needed to ensure a development runs smoothly. They are
excellent at planning, managing, and coordinating a project, as well as
maintaining financial control, to ensure it happens in less time, with less
money, yet with a better result.
They can conduct feasibility studies for you, help you budget accurately,
obtain relevant permits and liaise with council and other authorities, organise
surveys, prepare working drawings and specifications, obtain quotes and appoint
trades, oversee and supervise trades and quality of workmanship on-site,
coordinate with real estate agents, and manage invoicing on your behalf.
Although you will certainly pay for the privilege of a project
manager, they can be worth their weight in gold. They will eliminate stress,
enable you to concentrate on your day job and your family, allow you time to
plan forward for your next development project, and most importantly, take care
of all the time consuming and difficult tasks to deliver the most profitable
project possible.
In the end, although you may be able to project manage yourself,
it doesn’t always mean you should. Would you make your clothes just because you
could and because you might save a few dollars? Probably not, because your time
is better used elsewhere and when you include the cost of your time and the
mistakes you make, the initial monetary savings quickly dissolve anyway. The
same rules apply here. Be realistic about your capabilities and experience, the
cost of your time, and the scope of the development. Professional project
management in most cases is an investment, not a cost.
For more information on how Momentum Wealth can assist you with
your property development, contact Emma Everett on 1-800-000-159 or email
info@momentumwealth.com.au
