Hi,
It is a known fact that in the long run two properties with same purchase price one with higher capital growth and other with higher rental yield and lower capital growth. The property with higher capital growth will outperform the one with higher rental yield/lower CG.
The point is you cannot guarantee the future CG (%). So to a certain extent you will be speculating or in other words taking risk. On the other hand rental yield is to a certain extent guaranteed as it is known fact if you have tenants in the property already paying a certain amount of rent.
You know your cashflow situation and can plan accordingly your next purchase.
My own strategies have changed over time from investing mostly for CG (above average > 10%pa) and average yield (4%pa) to now investing for maximum yield (> 6%) and average growth (6-7% pa). Both strategies would average approx. 14% or so return. Although, I believe the latter strategy gives me more certainty on being able to keep purchasing at regular intervals without depending solely on CG.
I have a certain figure in mind on the amount of assets (in dollar value), I want to accumulate and have decided to take a strategy which I believe is less speculative.
Cheers,
Oracle.
