Economical Aspects of Architectural Design

Economical Aspects of Architectural Design

Basics of Project Management

Contents

a Describe and explain the difference between real estate and other assets economic goods eg capital products

b Give at least three reasons why a client make an investment in real estate

c In line with the scenario List and explain all of the following the reasons for the client to appoint a Project Manager referring to a least five 5 clients tasks

d The kindtype of skills a Project Manager should have and explain why she should be generalist within a clients organization

e In line with the scenario List and explain the differences between line and staff functions Project Leadership and Project Controlling within different project management functions giving at least five 5 examples concerning clients tasks

f List and explain the differences between transferable and nontransferable clients tasks

g Explain and compare the goal and the differences between the three3 management services namely Project Management Project Development and Facility Management

h List explain and debate the major aspectscharacteristics to optimize the investment cost and subsequent followup costs within the design under constant consideration of the intended purpose Also explain the basic interrelation between investment cost and subsequent cost

As the instructed project manager for an office building you are being asked to analyse the architects design concerning economical aspects by answering all the tasks in this brief

Task 11

a Describe and explain the difference between real estate and other assets economic goods eg capital products

In order to know the differences between real estate and financial assets one must first understand what these assets are First and foremost real estate is all of the valuegenerating properties and commodities owned by the client being physical items such as lands and buildings on which you can put a specific value on Such value is determined by various factors like the location functionality and cost Meanwhile financial assets are all those transactional instruments which can be converted into cash In fact such assets can be in the form of trade receivables shares or bonds and are done to represent an underlying value or percentage of the real estate The difference between the two is that such financial assets are more liquid when compared with real estate since they can be easily converted into cash In fact financial assets such as stocks can be easily sold within a matter of hours while real estate normally takes months to sell Another difference between the two is that the actual property may experience depreciation through the years while financial assets may generate more cash flow due to perpetual growth over the years Needless to say one must keep that in real estate the client would own the actual land a land component which will have an infinite lifetime Also financial assets may possess a greater risk since the investment being done cant be physically seen or studied Finally one must also keep in mind that the economic cycle is always changing by time as seen in the image below and therefore if such investment is to be done the client must have an idea of the economys situation in the near future



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b Give at least three reasons why a client makes an investment in real estate

There are various reasons why a client should invest in real estate These three main reasons are
Rental

Such procedure is considered to be an old practice which is still commonly used nowadays were the client buys a property and rent it out to a tenants

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