What rental yields are acceptable in this low inflation and low interest rate environment?

[nmb]

What is the minimum rental yield you would accept in the current environment? We also need to ask ourselves how this target would change as interest rates eventually rise and inflation recovers? It may not be until 2021 in the UK but it will happen at some point.

 

[paulmurph272003]

Thanks for the post nmb. As someone who works in Acquisitions for a property investment company, I can tell you that by far the most important thing for me is Return On Investment (ROI),and not yields. However, for what it's worth, I would typically look for minimum 8 or 9% gross yielding properties outside of London. But from an ROI perspective, again outside of London something above 7.5-8% is competitive (maybe 6.5-7% in places that are starting to shoot up in value like Manchester).

Hope this helps - if you'd like to find out any more about this or have any questions, do not hesitate to get in touch.

Thanks,

Paul

(PS - this is my first post - hopefully of many!)

 

[nmb]

It is very interesting to see "real returns" significantly higher than traditional levels due to relatively low inflation and interest rates. While some experts believe that property prices in the UK have moved into dangerous territory, is it simply a case of investors "making hay while the sun shines" and bagging substantial real returns before rates rise?