For many aspiring investors, the biggest hurdle to entering the property market is securing the capital needed for a deposit and financing costs. However, there are several strategies that first-time investors can use to get started with limited capital.
Antonie Goosen, principal and founder of Meridian Realty, believes that strategic planning and leveraging financial tools can help new investors overcome the initial cost barrier. “Property investment doesn’t always require a large upfront capital outlay. With the right approach, first-time investors can start small and build their portfolio over time,” he explains.
One of the most effective ways to enter the market with limited funds is by looking for 100% home loan financing. Many banks in South Africa offer full home loans to first-time buyers, particularly those with a strong credit history and stable income. “Getting pre-approved for a home loan gives you a clear idea of what you can afford and improves your chances of securing financing,” Goosen advises.
Another strategy is to invest in partnership with family or friends. Pooling resources allows investors to share the financial burden and enter the market sooner. However, Goosen cautions that clear legal agreements should be in place to outline each party’s responsibilities and exit strategy.
Buying a smaller or more affordable property is another practical approach. Entry-level apartments or studio units often have lower purchase prices, making them more accessible to first-time investors. “Smaller properties tend to attract high rental demand, especially in city centres and near universities,” says Goosen.
For those struggling with affordability, purchasing in an up-and-coming area can be a smart move. Emerging neighbourhoods often have lower property prices but strong potential for future growth as infrastructure and amenities improve. “Investors who buy in these areas early can benefit from significant capital appreciation over time,” Goosen notes.
House hacking is another creative strategy where investors purchase a multi-unit property or a home with a rentable section, such as a granny flat. By renting out part of the property, investors can offset their bond repayments and reduce their financial burden.
Government incentives and first-time buyer assistance programmes can also provide financial relief. Some banks offer reduced or zero deposit loans for first-time buyers, while developers sometimes provide incentives such as transfer duty savings.
“The key to getting started in property investment is to think creatively and explore all available financing options,” Goosen concludes. “With careful planning, even those with limited capital can take their first step onto the property ladder and begin building wealth through real estate.”
