Purpose – This research investigated the constraints to investment in residential
rental property in South Africa. This research does not attempt to value or place these
constraints in any hierarchical order; rather, it identifies the constraints in the South
African context for research in the future.
Design – A literature review was conducted, and constraints to residential rental
property were identified. A semi-structured interview was then designed, and a field
study was launched, interviewing key residential investment property market
stakeholders regarding their views on the constraints to investment in residential
rental property in South Africa. Quantitative data was used to corroborate the findings
of the interviews, and pattern analysis was the technique drawn on to explain the
findings.
Findings – Participants identified six major constraints to investment in residential
rental property in South Africa. These include financial liquidity or funding; property
liquidity; management skills; management costs; the lack of investment market
information; and legal constraints.
Practical Implications – The results of this research will enable further research into
the specific constraints mentioned above, in order to assess if there are ways to
minimise those constraints going forward.