Since the preceding article is about the value of planning your real estate investment as a project, it is only fitting that I follow it up with an article that addresses the importance of managing your real estate investments as a project. While there is an old axiom that states that the failure to plan is synonymous with planning to fail, the lack of proper execution and control throughout any investment life cycle will most assuredly result in failure as well. That being the case, managing your investment as a project will allow you to introduce the necessary project management processes that are necessary to insure that your projects stay on track and yield the desired returns that you planned for.
These project management processes include executing processes such as project plan execution, quality assurance, team development, information distribution, solicitation, source selection, and contract administration; and controlling processes such as integrated change control, scope verification, scope change control, schedule control, cost control, quality control, performance reporting, risk monitoring, and risk control. While the confines of this article are far too limited for me to go into any great detail on all of the project management processes, let’s just suffice it to say that they are all valuable and relevant
to the success of any investment project.
I will, however, go into some detail with regard to the performance reporting process-probably one of the most critical project management processes for the simple reason that getting anywhere in life has very much to do with knowing where you are at any given time. The inputs into the performance reporting process are the project plan, work results, and other project documents that pertain to the project context and the outputs are performance reports and change requests. The appropriate tools and techniques used within the process itself consist of performance reviews, variance analysis, trend analysis, earned value analysis, and information distribution tools and techniques.
The earned value management technique that I mention in the paragraph above is literally at the heart of effective project management and allows you to determine where you are within the context of your investment project relative to where you should be in terms of time cost and scope. It allows you to see whether you will hit your mark by continuing on the course that you are on, whether you will need to make radical adjustments in order to hit your mark, or whether the odds against hitting your mark are too great and you need to scrap the project altogether and cut your losses. We use earned value measurement techniques to keep our projects on track in terms of time, cost, and scope. If you would like to find out more about how to apply earned value measurement techniques to your own investment projects and maximize your returns, get a hold of me and let’s talk.
“Earning You Many Fond Returns…”