Buy-to-rent strategy 'viable' in booming property market

Africa Melane speaks to Renier Kriek, Co-Founder of Sentinel Homes.

While people 'semigrating' to Cape Town and buying up property along the coastline is one property trend to look out for, another is the buy-to-rent property market, says Kriek.

At the moment, the "buy-to-let market" is booming.

Typically, 4% of home loan applications relate to some form of buy-to-let but there's been above 11% over the last few years which is almost triple the expected rate. The buyers' market is also at a 15-year high for investment property applications, explains Kriek.

This means that it's a good time to buy property and will continue to be if interest and inflation rates decrease.

To get into the property market, buying property to rent if you can't afford to cover the monthly instalment yourself is a viable option to get into the property market, advises Kriek. 

Buying to rent is often called a "smart money strategy" because you are investing in an asset that will be yours but you won't have to pay it off by yourself.

This indicates that people's salary inflation can't keep up with asset inflation which means property becomes unaffordable, buying-to-rent makes buying property attainable, says Kriek.