The Role Of The Project Manager In Property Development
Last updated 05/04/2019
Unless you have a huge surplus of time on your hands and a degree in building construction, you are going to need someone who already has both to act as the project manager for your chosen property development scheme. Of course, if you are working with a joint venture partner or joining a company as a shareholder-investor, you shouldn’t have to concern yourself with any of the above as they tend to appoint independent project managers.
So what exactly does the project manager do?
The project manager does exactly what their label states; they physically manage and oversee the entire development throughout the lifecycle of the project. There are four phases within the projection lifecycle - initiation, planning, execution and closure. Whilst working through these phases, the project manager ensures that everything proceeds on schedule and within budget. The role is crucial simply because without the skills that project managers provide; the project is in danger of not being delivered at all.
In-depth project management
Apart from the type of project management that takes care of the “nuts and bolts”, there is also a need to manage the investment and financing aspect of projects too. Unlike the day to day operation of the practicalities of actually getting the project built, there is a need to ensure that funds, investments, and costing are also handled in a most cost-effective way too. This is typically mapped out in the project planning phase where a project manager puts together the plan, scope, programme, financial analysis, cash flow, and procurement.
On time and within budget project delivery
If investors, project owners and those who provide the finance are to gain the maximum benefit from any project, it is crucial that it comes in on time and within the confines of its projected budget. Schemes that are behind schedule tend to be subject to default interest from the senior debt lender, which naturally reduces the profits due to stakeholders.
Any investor that is astute enough to recognise how important these factors are to any returns from rent to resale, will also, by default, recognise the importance of securing the highest quality project management services.
Project management that “pays its way”
Companies such as JaeVee have a wealth of industry experience so what tends to come with experience is know how. This is why each and every project JaeVee works with a property developer on benefits from the services of a highly experienced and independent project manager. The cost of which comes out of the professional fee fund allocated for each scheme.
The JaeVee approach to project management
The business model at JaeVee is based on exits being achieved. Because of this, we only succeed when our property developer partners achieve their exit strategies, which in turn means the equity investor does likewise. This win, win, is built into our ethos and that is why we ensure our experienced project managers that have a track record in delivering similar schemes are appointed.
By allocating a portion of the professional fee fund to a project manager, ensures that our equity investors receive comfort knowing there is another entity also overlooking the scheme.
There may be occasions where the developer themselves actually manages the project, if they have proven experience in doing so. The project management payments are spread across the projected time span of the project as equal monthly payments. This provides a mechanism that allows for uninterrupted continuity in the unlikely event of an existing project manager being unable to complete.
Now. if you're only just starting out in this world of property development, have a read of this Blog for the basics.
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