Essential Financial Indicators for Real Estate Salespersons
Generic Category: Creative Thinking (2 CPD credits awarded, subject to KEO’s approval)
Course Duration: 3.0 hours
Course Synopsis:
Property purchases and leases involve substantial amounts of money. To make an informed and wise decision, real estate salespersons can help clients make decisions by showing them the market yield for such properties. When dealing with companies and business people (particularly for commercial and industrial transactions), companies calculate various rates of return for owning property.
What is gross yield versus net yield? How is rate of return calculated? What is the difference between ROE (Return on Equity) versus ROI (Return on Investment)? What is IRR (Internal Rate of Return) and NPV (Net Present Value)? How are they used? Why are they important to property investors and purchasers?
This CPD module is an introductory module which provide the essentials about these financial indicators used in real estate. It explains how these numbers are derived, how to use them and what are the limitations of each type of indicator.
This course is intended for people who do not have a background knowledge of real estate financial indicators. It is an essential core topic that all real estate salespersons should know because every buyer needs to know the market yield of his property versus its bank loan interest rate to determine whether he is in negative gearing before making the decision to purchase. Other than yield, the other measures are useful tools for salespersons to help companies assess the financial attractiveness of the properties that they are considering before committing to buying or selling them.
Course Objective(s):
The objective of this course is to train real estate salespersons in the key financial indicators that are used in real estate so that they develop competency in understanding and using them in real estate transactions. These indicators are: –
- Gross Yield
- Net Yield
- Average Rate of Return (ARR)
- Return on Investment (ROI)
- Return on Equity (ROE)
- Payback Period
- Internal Rate of Return (IRR)
- Net Present Value (NPV)
Learning Outcome(s):
After the course, participants should understand and be able to calculate: –
- Gross Yield
- Net Yield
- Average Rate of Return (ARR)
- Return on Investment (ROI)
- Return on Equity (ROE)
- Payback Period
- Internal Rate of Return (IRR)
- Net Present Value (NPV)
- To appreciate the advantages and limitations of each type of measure.
- To appreciate how these measures are used to assess the financial performance of properties.
ABOUT THE TRAINER
Harold Tan
Director (Real Estate Advisory), VestAsia Group.
Trainer, Certificate in the Marketing of Commercial Properties & Various CPD Courses
B Sc (Hons)(Real Estate), MA (Business Admin), MICSC, ACTA
Harold Tan is the Director of Real Estate Advisory at VestAsia Group. He advises companies on all aspects of property development and helps them prepare to set up real estate fund management and REITs. He has experience in computing and using the various financial indicators in real estate for feaseability studies in his advisory for work for various companies such as Capitaland, Keppel Land, Frasers Centrepoint, Noel International, ING Real Estate and GIC.
He has over 35 years of experience in the real estate industry spanning the mixed-use commercial developments, shopping mall developments, hospitality (serviced apartments), hi-tech business parks and mega integrated townships. His experience covers all the sectors of the property market – residential, retail, office, industrial and hospitality. He provides real estate advice, development and investment strategies for property developers and investors in the Asia-Pacific region.
Harold was previously a professor at the National University of Singapore. He taught classes in real estate market analysis, investments & developments, urban planning and business ethics for postgraduate and undergraduate students. In addition, he conducted customized programs for corporations such as Capitaland, Colliers International, Jones Lang LaSalle, and the Temasek Wealth Management Institute. He was conferred the NUS Teaching Excellence Award by the university. He continues to teach by way of conducting training programmes for management staff and high-level executive programmes and is a sought-after trainer for professional managers. He has taught at Dubai Real Estate Institute, Asian Institute of Management and the International Council of Shopping Centers.
Prior to teaching at the university, Harold spent many years in senior management positions in various companies that invest in shopping malls. He was the General Manager of Centrepoint, a successful shopping mall in Singapore. He has managed all aspects of mall development and operation, including planning, site selection, design specification, refurbishment and repositioning projects, marketing and leasing, revamping and restructuring, joint-venture development, investment and asset management of various mixed use projects in Asia-Pacific including countries such as China, India, Indonesia and Vietnam.
He has worked closely with top Asian companies that invest and manage commercial properties, such as Centrepoint (Singapore), Capitaland (Singapore), Asian Mall Management (Singapore), Great World Group (Hong Kong), Bombay Dyeing (India), Ciputra Group (Indonesia) and Sama Dubai (Dubai, UAE). He now actively provides strategic analysis and consulting services to companies such as EDIS, JVA Corporation and Noel Gifts International.