Return of Mr 10%

I am a great believer in order, patterns, symmetry. If one looks around nature is full of the most wonderful balance structures and you know it comes down to figures. One of my favourite is 10.

More specifically 10%. Why?

If somebody presents me an investment opportunity yielding 10% then instinctively I know that this is a good deal. It is not ridiculously high. If somebody offers to make you 30% in a year, I think straight away - high return yes, but this must come with a high risk. 10% is neither massively high return but it is also a good return given the opportunity cost of capital.

Where do professional landlords go for landlord insurance?

The heartening thing about the turmoil in the capital and property markets is that we are rapidly approaching a time when a 10% yield on residential investment property is achievable. One only has to look at website such as www.propertysnake.co.uk to see that the speed of fall of property prices could see a 10% gross yield on some investment property.

I have myself been awoken from my investment slumber by an opportunity in my manor. Priced at £67500 this 2 bed house should be able to generate £450 month rent or £5400 pa. Therefore, if I can knock just over £10k of the asking price, I'll be in sight of the mythical 10%. If the vendor doesn't play ball.........I can wait, no rush. So landlords and investors keep your eye open for the 10% yield, then you can be certain you've got a nice stable long-term property investment.