23-05-2025
Rentvesting: The property trend you need to know about
Rentvesting: The property trend you need to know about
The concept is simple: Live where you love, invest where you can afford. Makes sense, right? That's the crux of rentvesting – buying investment properties in affordable areas while renting homes in suburbs where you want to live.
South Africa's buy-to-let market has continued its upward trajectory since its resurgence in 2022. ooba Home Loans reported that 32% of all buy-to-let applications in Q1 '25 derived from the country's most expensive province, the Western Cape.
This strategy, adopted by Gen Zs and early millennials, is particularly effective as renting remains cheaper than buying – especially when factoring in the costs of levies and municipal fees.
Take a look: An average one-bedroom property on Cape Town's sought-after Atlantic Seaboard would cost a homeowner upwards of R2 million, which comes to R20,644 per month (over 20 years, no deposit at 11%). The average rental for a one-bedroom property starts from R12,000. That's a no-brainer, right?
If you're looking at adopting a rentvesting strategy, start with these four practical tips from Only Realty Group:
Do the math:
Make sure that the property you are purchasing makes financial sense to rent out, and vice versa. Do not overinvest in a rental:
While it makes sense to invest money (within reason) into upgrading a property you own, money spent on a rental is essentially a gift to your landlord. Understand the full implications of homeownership:
Have a little savings account in case you go without a tenant for a couple of months so that you can cover the monthly costs, such as levies, municipal fees and bond repayments, in times of emergency. Remain objective:
Do your homework before you buy that investment property and make sure to opt for an area that is in high demand and offers good returns. Do some research on what properties are selling for in various areas and what they are rented out for.
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