Wording – Chrissie Johnson
Not every young first-home buyer is following the traditional path of purchasing a home to live in. Increasingly, many are opting for “rentvesting” — buying an investment property in an affordable area while renting a lifestyle-driven home in a location they prefer.
The Gen Z generation thinks differently. With the oldest Gen Zs turning 29 in 2026, this generation is moving into their wealth-building years, but affordability gaps remain a significant hurdle. With interest rates still relatively high (though it is anticipated they will ease later this year borrowing substantial amounts for a primary residence in a good area is increasingly difficult.
At the same time, property prices in key cities and sought-after coastal areas have surged over recent years, placing traditional first-home ownership out of reach for many. Rather than saving for years to secure a large deposit in these markets, younger buyers are purchasing more affordable properties in regional areas or smaller cities. This often results in a smaller loan and, in some cases, a positively geared investment where rental income covers most of the bond repayment.
This strategy also enables them to enter the property market sooner instead of delaying ownership until they can afford a “forever home.” Many are also exploring joint purchasing structures with family or friends to improve affordability and reduce risk exposure.
This rentvesting approach provides a workaround solution giving them the best of both worlds: the lifestyle they desire and a foot on the property ladder.
In effect, this generation is reshaping the concept of homeownership. By separating lifestyle from investment, they can rent in vibrant areas close to work hubs, cafés, beaches, or family — while their capital is deployed into property that makes financial sense. The focus shifts from emotional ownership to strategic asset building, with the added benefit of potential long-term capital growth.
Social media has further amplified the trend. “Fin-fluencers” on TikTok have made rentvesting aspirational —and accessible, but they also make it appear deceptively simple. The strategy is not without complexity and sound financial advice remains essential to avoid over-extending themselves or underestimating ownership costs.
Importantly, South Africa’s rental market is still fairly resilient, with solid tenant demand and competitive yields in well-selected nodes. For buyers who purchase prudently, rentvesting can offer a balanced pathway to equity growth without the financial strain of servicing a large owner-occupier bond in a premium suburb.
Ultimately, many younger buyers view rentvesting as a less financially stressful way to gain exposure to property — particularly in a higher interest-rate environment. Rather than committing all their income to a large owner-occupier bond, they are prioritising passive income, flexibility, and long-term capital growth.
If current affordability pressures persist, rentvesting is likely to gain further momentum through 2026 as Gen Z continues to redefine how property ownership begins.
This article is for general information only and should not be used or relied on as legal or other professional advice. No liability can be accepted for any errors or omissions nor for any loss or damage arising from reliance upon any information herein. Always contact your adviser for specific and detailed advice. Errors and omissions excepted (E&OE)