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Small House Estimate Report Assignment

Question: Estimating small house includes ground floor stairs and stairs room. Advise clients anticipated development costs. The director of the company appointed you to prepare a report for a client . This particular price estimate and budget should act as a comparison tool. Provide the client with a professional and reliable cost planning that includes the design , tender, construction and maintenance phase

Solution:

CLIENT REPORT FOR SMALL HOUSE ESTIMATE

INTRODUCTION

"ALTIUS" is a new upcoming project in Oman in the suburbs, not too far away from the main corporate sector and market place. Just five minutes drive from the local high school, hospitals, airport, and railway station, so is well connected with almost all parts of the city.

The project will be a joint venture between Simplex Realty and Oman Constructions. It will consist of row houses at a nominal and affordable budget. The project has been planned keeping in mind the demand for houses for a family of 3-4 people with only 1 earning members. Such projects have been huge success in the past globally and mainly in OMAN because of increased fascination for small houses, with good security and maintenance facility.

 The project consists of a small bungalow which has been planned as per the day to day requirements of any individual or family staying in the bungalow. The house will be built on a total covered land area of 500 square feet more or less. The constructed area of each row house will be more or less 1500 square feet which includes a living area, kitchen, 3 rooms along with 4 toilets, a store room, living, dining room, stairs and stairs room along with space for car parking for a car. The  house will be fitted with good quality sanitary equipment's, wooden flooring in master bedroom and Italian marbles in the other rooms and living area ,while the kitchen and toilets will have anti-skid tiles. 

The project shall be completed in an approx. time dimension of 2 years more or less. Simplex Realty has been successful in completing and delivering such projects on time in various locations in Oman. L & T who had played a major role as contractors in the past projects has been chosen to take the responsibility this time here again. The brand loyalty of L& T helps in increasing the trust of the project within the buyers who wants to buy this project.

The targeted customers as identified by our research team are salaried professionals who area working in at least a senior manager level in various IT and Non It Company in the nearby developing areas. Since a lot of new companies have moved to nearby locations in OMAN seeing the potential in the market, thedemand for their residences arises as well. The facilities provided are fitted to fulfill the day to day needs of such builders.

The various departments required for this complete project are:-

1. Purchase Department- to supervise the purchase of raw material needed and coordination with other departments.

2. Sales & Marketing Department - To avoid increase investment on this project a strong marketing team should be designated. The booking at ground level will help in reducing investments thus inducing better return for the developers and timely delivery for the buyers.

3. Contractor department- This department should deploy a well designated team of engineers, coordinators, in charge .This team will assure the good quality bungalow to be delivered to the user. The delivery of this project completely depends on the contractor.

4. maintenance Department - this department will take care of security, plumbing, electricians, cleanliness, pest control and other pity works in the project.

5. Accounts department- This department will take care of all the inflow and outflow of the cash.

6. Architect - Architect will look after the structural design, plumbing points and planning as per the soil test of the land.

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MAIN BODY:PHASES OF THE PROJECT

A  project like this shall be completed in various phases. Each phase will have a different set of people working on this project.

INITIAL PHASE: PROJECT PLAN

PROFESSIONAL TYPE

CHOICE

REASON

ESTIMATE

ARCHITECT

AGARWAL ASSOCIATES

Agarwal associates have been pioneers in real estate sector in Oman. Theirexperience, expertise and skills will help in us finding the potential of this project. The will provide the best of designs to attract the customers. They know the market trend, so will suggest the best quality of work, material and project plan which will help in finding the clients and selling and keep a good reputation for all our future endeavors.

1 percent of the project value.

PARTNERS

Kejriwal and associates

Kejriwal and Associates are best suited to be the investing partners with us during this project .There are various reasons for this. They are financially very sound so any immediate requirement of funds shall be met with. The don't interfere in day to day working of the business, They just invest and look for returns which will always have our control in this project.

15 percent of the project value

RESEARCH TEAM

INHOUSE TEAM

The company will hire experienced people from real estate in Oman. They best know what the other competitors are providing, growth in the various sectors,and tie-ups with the banks who will provide financial assistance to our clients who will buy this bungalow. They will also research on the latest trending materials, designs and concepts in any apartment. They will suggest the necessary changes so that we are one step ahead of our competitors.

They will be hired on a salaried basis. The time frame for this work should not take more than 2 months.

CONTRACTOR

L & T

L & T will be hired because their legacy is unmatchable. They will cover the most important aspect in any real estate project. They will take care of the labor. The machinery installed for the project shall be provided by the contractor itself. Sand, cement, mortar,bricks or any other construction material shall be the sole responsibility of L&T thus making it simpler for us to focus on other aspects. The expertise of L&T is unmatched in this field in OMAN.

 They are estimated to charge approximately 1000 RIAL per sq.ft for their services.10 percent of which shall be paid at the time of signing of agreement. 5 percent each in 14 different installments which will be paid as per completion of work as per specified payment schedule in the agreement.i.e, on completion of piling, on completion of ground floor roof casting, on completion of brick work, on completion of 2nd floor roof casting and so on.A final installment of 10 percent shall be paid after final handover after adjusting all damages or adjusting interests in case of late delivery.

Sales Agents

DHANUKA REALTY

A meeting shall also be held with directors of Dhanuka Realty, since they have been a pioneer in this business for the past decades. They can guide for the exact pricing which we should charge the customer  for this house. They will also tell us for the scope to give returns to the retail investors who will buy the property initially only to further resale at an higher profit. The will also guide us on how to keep a competitive price since they are also working with our competitors ,so they may let us know what we should do to be one step ahead of our competitors.

1.5 percent of the total sales with their contacts.

PROJECT LEADER

MR BAJAJ

Our very own Mr. Bajaj will be heading this project and will supervise all the deals and will be the sole authorized signatory in any major decision taking or dealing with various free lancers during the project.

No additional profits except the salary in general. He will be rewarded with goodwill.

TIME PERIOD AND EXPENSE

The time taken for this phase should not be more than 60 days.

the total expense incurred for this phase should not exceed 30 million RIALS which may include advance payments to the professionals who will  be working with us through out this project.

 

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 SECOND PHASE: DESIGN PHASE & CONSTRUCTION PLAN PHASE INCLUDING COST ANALYSIS

After all the planning is done in the first phase, its execution is important in the second. The basic structural design of the house, the inner fittings and its cost is to be finalized. The different vendors have to be finalized for the best quality work. They are:

  • LARSEN & TOURBO - The L & T has been hired for contractors and they will take the responsibility of the following materials and things at a package cost of 1000 rials per sq.ft.The following are:-
  • CEMENT
  • MORTAR
  • BRICKS
  • CONCRETE BLOCKS
  • SAND
  • WET SAND
  • PIPELINES
  • WAGE LABOURS
  • INCHARGE
  • MACHINERY- INCLUDING THE HIVA, TRUCKS ,TRANSPORTERS ,LIFTERS , FORKLIFTS ,MATERIAL LIFTERS AND ANY OTHER WHICH SHALL BE REQUIRED FOR THE ENTIRE CONSTRUCTION PROCESS/
  • SEWAGE PIPES
  • IRON RODS
  • IRON ITEMS
  • NUTS AND BOLTS
  • SCREWS
  • ANY OTHER ITEMS REQUIRED FOR STRUCTURAL MATERIAL.
  • TILES SQUARE- the Tiles Squarehas taken up the responsibility for the flooring work of the houses. The prices fixed with the are as follows:-
  • Wooden flooring- The wooden flooring will be provided in one of the rooms which will be referred to as the master bedroom. This has been quoted to us and finalized at a price of 50 rials per square feet.
  • Italian marble- The remaining 2 rooms and the living dining area will have Italian marble fitted on floor so as to provide elegant look. The flooring will completely be done with 3*2 feet slabs of marble. The cost of which is 30 rials per square feet.
  • Anti-skid tiles - The washrooms and kitchen will have anti skid tiles so as to avoid in casualty because of slippery floor as there will be water usage. These will be 1*1 in dimension and will be charges at 20 rial per square feet.
  • Mosaic- The terrace area and the servant quarter will have mosaic flooring, the cost of which is 25 rial per square feet.
  • DEV SANTIATIONS- All the sanitary fittings is to be provided by Dev.Sanitations. The various items and there prices are:-

Commode - They will provide wall hanging commodes of 15000 rial per commode and 2 commodes in entire apartment which will cost us total 30000 rial along with fitting charges.

Taps-A total of 5 single taps and 4 mixer taps should be installed in the house; it has been quoted to us as 600 rial per tap.

Shower- Shower is required in each washroom and will be installed at a cost of 1000 rial per shower.

Kitchen sink- 6000 rial

Wash Basin- A total of 3 wash basin of reputed make will be installed in each house and at a price of 2000 per wash basin.

  • ALLUMINA & CO. - They will be responsible for the doors, aluminum windows, grills for the house at a total cost of 6000 rial per house for all these/
  • GODREJ- The lock is to be installed by Godrej at the main door, room doors, washroom doors, door of the servant quarter at a total cost of 5000 Rial for the entire house.
  • AGARWAL ASSOCIATES- They will provide the structural designs and the placing of the pipelines for the entire house. They will also take care of the shape, strength of the structure, wind resistance, earthquake resistance of the entire house. They will charge 40 rial per square feet for the designing and planning.
  • ASIAN PAINTS- Asian paints will be hired for internal and external painting and putty of the entire house. They have quoted 16 rial per square feet for this entire work.

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THIRD PHASE: CONSTRUCTION PHASE

This phase starts after all the vendors are finalized and advance payment is made to all the vendors. This is the longest phase in this project and is the backbone of the entire project. This phase will last for approximately one and half year. The works included in this phase are:-

  • Sales
  • Receiving part payments from buyers.
  • Making part payment to vendors
  • Accounting
  • Branding
  • Supervision
  • Coordination
  • Legal agreement preparation
  • Tax payment
  • Meeting with government guidelines
  • Marketing
  • Looking forward to maintenance phase
  • Public relation

This phase will see incurring of lot of indirect expenses restricted to indirect overheads. This phase ensures completion and delivering of houses which are our products which are to be sold and used by the customers and make sure that they rely on us for our future projects.

LAST PHASE: MAINTAINANCE PHASE

 This is the last phase and is more like after sale services. This includes providing support for day to day activities which includes:-

  • Electricians
  • Plumbing
  • Security and surveillance
  • CCTV cameras
  • Pest control
  • Association formation
  • Legal Aspects
  • Municipal taxation
  • Maintenance of club
  • Cleanliness

This phase will continue for a period of 1 year after which an association will be formed among the residents and such day to day affairs will be handed over to the residents of the society. This will mark the finishing of the entire project. The cost for this phase will be borne by the owners of the houses irrespective they start residing or not. A nominal amount of 1.5 rial per square feet will be charged from them for these services along with a nominal charge of 2000 rial for association formation.

DISCUSSIONS

This project has been spoken about with experts all over the globe and has been well appreciated with planning. The starting value of each house is estimated to be approximately around 16 million rial including all taxes and is expected to be a public hit when launched at this price. Our company aims to increase price by at least 1 million after sale of every 10 units and expect to sell the last unit at a price of not less than 20 million, so as to give great positive returns to our retail investors as well.

Oman is a developing country and the continuous shifting of people towards the city and from all across the globe will ensure the safety and sales of this project. The project has been approved by all local banks and also special rates are available for foreign investors. This project is expected to create a new revolution in real estate sector in Oman.

CONCLUSION WITH RECOMMENDATIONS

From the above assignment I conclude that ALTIUS is a very well planned and well equipped project with all the basic and modern amenities which is required for any successful real estate project. I have full faith in this project and is expected to be a landmark one and expected to raise the standards of real estate development in Oman by providing solutions for easy and luxurious living.

I even recommend people and even investors to buy the project for a better experience of living with a perfect value for money.

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