Property

South Africa has a hidden property gem

Kirsten Minnaar • 10 October 2025

Township properties, when developed with quality, tenant-focused design and reliable amenities, can become highly profitable investments that command significantly higher rental income than standard affordable housing.

This is feedback from Nqobi Malinga, the Johannesburg portfolio manager for property financing company uMaStandi.

Malinga said that even though townships have historically been perceived as areas with limited resources and opportunities, upgrading properties in these areas both uplifts the community and offers greater profitability for property entrepreneurs.

“By developing properties with care and with their tenants’ needs top of mind, property entrepreneurs developing in the townships can reap the benefit of offering quality real estate,” he said.

For instance, while affordable housing rentals are often around R2,500, high-quality township apartments can earn between R3,500 and R4,500.

“In fact, within the affordable accommodation sector, uMaStandi has observed that tenants are prepared to pay an additional R1,000 to R2,000 for properties offering sought-after features,” Malinga said.

He stressed that property entrepreneurs should remember that their tenants are people first and cater to them accordingly.

“There is some psychology behind creating a property that is not just four walls and a ceiling, but is an attractive, livable space,” he said.

He explained that tenants want a haven from the world where they can feel safe and happy. “Having a home that is of higher quality can fill tenants with a sense of achievement and pride,” he said.

Property entrepreneurs should focus on meeting tenants’ emotional needs, not only their basic needs for survival and security.

Doing so will increase the likelihood of tenants staying in the residence for a longer term, thus ensuring greater retention and less tenant churn.

Boosting the value of township properties

Nqobi Malinga, Johannesburg portfolio manager for uMaStandi

According to Malinga, there are several key strategies that property entrepreneurs can use to command higher rentals. First, he explained that the size of the property matters.

Units sized 25 m² seem to be the sweet spot for bachelor or one-bedroom units. This size allows renters to enjoy a larger queen-sized bed, entertainment area, and desk.

However, size is not the only factor that matters. The way the space is used is also important, he explained. Natural lighting is an effective way to make any unit more attractive.

Buildings with large windows in the right places, particularly in bedrooms and lounge areas, help bring in ventilation and light, elevating the living space.

Additionally, Malinga noted that high-quality properties must be kept clean and well-maintained to attract tenants and higher premiums.

“Secondly, having one’s own facilities and an independent kitchenette, rather than having to share a bathroom and kitchen, are significant drawcards and features that people are willing to pay a little more for,” he said.

“Thirdly, think in terms of tenant convenience for utilities and facilities. Reliable water and electricity services, along with fast Wi-Fi, are similarly essential for tenant satisfaction.”

Malinga said safe and adequate parking is also important, especially for young professionals or those whose car is part and parcel of their work.

“Furthermore, ensuring that your township property is safe and secure will make it more attractive to potential tenants. This can be achieved through well-lit streets and secure fencing,” he said.

Finally, he encouraged property entrepreneurs to invest in energy-saving measures to offset the rising electricity costs.

“One way to do this is to use energy-saving lightbulbs throughout the property and implement prepaid meters for electricity and water. And if geysers are shared, include a timer switch to manage the electrical demand for heating of water,” he explained.

Malinga added that while achieving slightly higher rentals in affordable housing is possible, it requires considerable effort and intention, from planning to design, building and finishes.

“However, it is well worth it, not only because it makes for a higher level of profitability, but also because it uplifts the whole area, contributes to urban regeneration and enables people to enjoy a higher standard of living,” he said.

Listed below are some of the higher value township properties currently available to rent in South Africa’s biggest township, Soweto.