Nc Real Estate Podcast

Yield is a representation of risk. The higher the yield, the higher the risk. The lower the yield, the lower the risk  Choose your yield wisely based on your ACTUAL risk appetite.  If you are happy doing developments or changing tenants around to go for the big win, knowing that if it doesn’t pan out, you’ll be leaving a lot of money in the deal then go for those double digit yields. But make sure to do your sensitivity analysis. See what will happen if you are £10k out on your predictions or even £5k, how does that impact your yields. Could you live with that? Compare this to the yield of a building where you would just buy it and sit and hold, collecting the rent and maybe organising the annual building insurance… maybe the yield is 9%, but how far off is that from your higher yielding property not working? The risk is yours, don’t be swayed by what someone else tells you. This needs to be constantly evaluated in your investment strategy. Interestingly enough I’m starting to see the tale of two property mar