Almost everyone wants to climb the ladder in some way or another, from employee to manager to business owner, for example, or from tenant to homeowner to landlord.
And although most landlords would be quick to point out that there's a great deal more to investing in and managing rental properties than just collecting the rent every month, they would generally also say that they would much rather have those responsibilities than be a tenant.
However, the first step on this upward journey is usually the purchase of a primary home, and the interest rate cuts made since September have already motivated many tenants to become homeowners. Indeed, almost half of all home loan applications at the moment are being made by first-time buyers.
More recently, though, the increase in the transfer duty threshold to R1,21m, and the cash-saving this creates for first time buyers, has encouraged some tenants to take two steps at once and become landlords themselves.
The most common way of doing this is to buy a bigger property than they actually need right now, and then rent out part of it, such as a granny flat or garden cottage or even just a spare bedroom and bathroom, in order to subsidise their bond.
Some positive aspects of this are that it promotes densification and good use of existing municipal infrastructure, and that it may well save a growing family from having to make another move later on, as they can just take over the space that was once rented out.
In addition, these newly minted landlords get the benefit of capital growth on a more expensive property, which is a big plus for those looking to build long-term wealth.
Capital growth on a bigger asset amplifies the return on investment, even if the value of two properties grows at the same rate. For example, 10% growth on a R1m property translates to R100 000 gain, but 10% growth on a R1,2m property delivers a R120 000 gain. This accelerates the growth of the investor's net worth and assists with access to emergency funds or finance for future purchases and portfolio growth, as well as retirement planning.
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But deciding which property to purchase is not as simple as just finding one with spare rooms or dual accommodation facilities - the area is equally if not more important and this is where it helps to seek advice from an experienced local agent who can also tell you if there's a demand for rental accommodation in the area and what rent you should realistically be charging.
In general, though, it is true that more expensive properties located in prime areas will command higher rentals and provide stronger cash flow, and will also tend to appreciate faster and retain value better during market downturns.
The best laid plans can all be ruined though, if landlords are not extremely particular about finding the right tenant/s. To young homebuyers, for example, it may seem like a good idea to get the hang of being a landlord by letting space to a friend or family member. But this could easily end badly as having a personal relationship with a tenant may make them feel obliged to "carry" them when they default on the rent.
They should rather try to keep things on a businesslike footing, and again this will be much easier to do with the help of an experienced rental agent, who can check the creditworthiness of prospective tenants without seeming nosy, check on the maintenance of the rental unit for you and, most importantly, make sure the rent is paid on time every month.
