Strategy and tactics

When buying residential properties, we’re continually evaluating our mix of strategy and tactics. To borrow from military theory, strategy presumes control and predictable outcomes. On the other hand, tactics rely on on-the-ground intelligence, so they’re agile in the face of unpredictability. They’re constantly re-oriented for the situation-at-hand.

One of our key strategies involves buying in pre-gentrified suburbs, because these are proven to offer the strongest yield and capital growth. But when there are noticeable market-variations, opportunistic tactics also serve us well. And we’ve analysed some very recent opportunities in pockets of Sydney’s eastern suburbs and Melbourne’s bayside areas.

Even though these are gentrified areas, some of their older apartments offer attractive yields, because their rental value has now caught up with the steep rise in their capital value. A class of renters willing to pay for character, amenity and status have shored-up stronger yields for these properties.

We’ve found some of them also stack up in terms of replacement-value and comparable-cost criteria. And because of their rarity, their capital growth is set to continue.

So when buying these properties, it’s the tactical intelligence delivered by current market conditions that can throw up some surprising opportunities.

Until next week,

Jock Bing