Those of you who are new to
real estate development business, need to understand what each Design professional contributes to
development team and
specific services they are capable of delivering for you.Knowing what they do for you ... what you are paying for is vital.
This is part of a series of articles I am writing for you to explain what each profession does in some detail.
So far I have covered:
. The Architect and Real Estate Development . The Structural Engineer and Real Estate Development . The Hydraulic Engineer and Real Estate Development
and now we'll tackle
generally mis-understood profession of
Quantity Surveyor.
The Quantity Surveyor (QS), can also be known in
development and construction industries as a Construction Economist, or even a Cost Manager.
At feasibility stage quantity surveyors use their knowledge of construction methods and costs to advise
developer on
most economical way of achieving project requirements.
Quantity Surveyors do not usually work on small developments, such as six or ten residential units/condos/apartments.
But when such projects get into
higher multiples, I have always engaged them as part of my development team.
It might be timely to remind you of my description of what a developer or development manager does - a developer is a Manager of human - physical and financial resources. S/he is not an Expert - s/he engages Experts to carry out their specialist work so that
DM can achieve
development's goal.
The DM is not an expert - a DM is a "Generalist" and happens to know a lot about what goes into putting a successful development together.
That does not mean that a DM may not have had a specific building/construction expertise, it is just that s/he engages other to do that work and takes on
General's Work of getting
entire development off
ground and then completed successfully.
So a QS is one of those specialist professions that a DM engages to advise on construction costs.
At
start of a project you may have used, what we refer to as, a 'broad brush' price for
construction figure or an estimate prepared by a builder or indeed a QS.
However you arrived at
figure, it becomes your Construction Budget upon which your projects financial viability has been established.
Well, once you start
detailed development of your Projects Design, you need ensure that every alteration, or I should say, expansion of
design, is still within
original Budget. That's another aspect of what your QS does for you.
A QS estimates and monitors construction costs, from
feasibility stage of a project through to
completion of
construction period and beyond if you require
services.
The QS forms part of
Design Consultant Team and work closely with developers, architects, engineers, contractors, suppliers, accountants, insurance underwriters, solicitors and Courts and with financiers.
A QS controls design construction costs, and compared them to
Budget Cost, by breaking down
building into major elements of
total cost structure - referred to as "elemental costs."
For instance, if most residential buildings, of
type and size you are proposing shows that foundations are usually $X per square foot or per square metre, and your plan design shows $X + per foot/metre, you would want to know why, at a stage of your project, when you have a chance to take corrective action.
Now within
major "elemental cost,"
QS has a further break down of costs.
Staying with
example of our foundations, you would have such items as Steel Reinforcing, Concrete. So if
foundation costs are high, you can see that
cost of steel has increased in
past 3 months by 12% due to whatever reasons.
At lease you know
reason for
increase and if you are stuck with it, you know you have to look for 'cost saving elsewhere' so that you don't break your Budget.
Quantity surveyors can use techniques referred to as Cost Planning, Estimating, Cost Analysis, Cost-in-use Studies and Value Management to establish and control a project budget.
See how important these guys are?