Building wealth from rental income: Is it still worth it?

Leonita Mhishi

FOR generations of Zimbabweans, owning a house has been more than a dream. It has been a badge of success, a retirement plan, an inher­itance for children and, increasingly, a business. Across Harare, Bulawayo, Gweru, Mutare and even smaller towns, conversations around wealth often end with the same advice: “Buy property and rent it out.” It sounds simple enough. Purchase a house, find tenants and watch the rent flow in every month. But in an economy that has repeatedly tested ev­ery investment theory, one question de­serves to be asked honestly: is building wealth through rental income still worth it?

The answer is neither a straightfor­ward yes nor an emphatic no. It is more complicated than many estate agents’ glossy brochures or social media proper­ty influencers would like Zimbabweans to believe.

There is no doubt that Zimbabwe’s property market has demonstrated re­markable resilience. Despite economic turbulence, inflationary cycles and cur­rency uncertainty over the past two de­cades, demand for housing has remained surprisingly strong. Urbanisation contin­ues to place pressure on housing supply while the country’s housing backlog remains substantial. Families continue moving to cities in search of opportu­nities, newly married couples need ac­commodation, university graduates seek rentals near workplaces and the diaspo­ra continues investing in homes back home.

This persistent demand explains why property remains one of the few assets many Zimbabweans trust. Unlike shares that can fluctuate wildly or businesses that may collapse, a house stands where it was built. It can generate income, ap­preciate in value and provide security.

Yet bricks and mortar alone do not guarantee wealth.

The biggest mistake prospective landlords make is confusing rental in­come with profit. Receiving US$800 in monthly rent may sound attractive un­til maintenance costs, municipal rates, insurance, security, repairs, agent com­missions and occasional vacancies be­gin eating into that figure. Gross rental yields are not the same as net returns, and the difference can be significant. Analysts increasingly warn investors to focus on actual cash flow rather than headline rental figures.

That distinction matters because many Zimbabweans purchase rental properties with unrealistic expectations. They assume tenants will always be available, rentals will always increase and property values will continue climb­ing indefinitely.

Reality is less generous. A landlord in Borrowdale may spend thousands of dollars replacing plumbing, repainting walls or repairing roofs after a long-term tenant moves out. Another may wait several months before finding a replacement tenant. Others discover that collecting rent consistently can be more challenging than anticipated.

Property investment is as much about management as ownership.

Ironically, some of the strongest rent­al opportunities today are not necessarily found in Zimbabwe’s most prestigious suburbs. Market data suggests certain lower-priced residential properties and high-density locations generate stron­ger gross rental yields than expensive luxury homes because acquisition costs are lower while rental demand remains consistently high. Some Harare market surveys estimate gross residential rent­al yields ranging from around six to 10 percent in many areas, with higher yields achievable in selected lower-cost neigh­bourhoods.

That is a lesson many first-time in­vestors overlook. Buying the biggest house one can afford does not automati­cally produce the best return. Sometimes a modest townhouse near universities, industrial zones or commercial centres may outperform a luxury mansion sit­ting partially vacant.

Zimbabwe’s changing demographics are also reshaping the rental market.

Young professionals increasingly prefer convenience over size. Many would rather rent a modern apartment close to work than commute from distant suburbs. Students seek secure accom­modation with reliable internet. Small families increasingly favour townhouses with manageable maintenance require­ments.

These changing preferences are cre­ating new opportunities for landlords willing to adapt.

The rise of short-term accommo­dation is another development worth watching. Business travellers, consul­tants, returning diaspora families and tourists increasingly prefer furnished apartments to traditional hotels. Recent market data indicates improving de­mand for short-term rentals in Harare, although competition is also increasing as more investors enter the market.

However, every opportunity carries risk.

One overlooked challenge is liquid­ity. Unlike stocks or savings accounts, property cannot be converted into cash overnight. Selling a house in Zimbabwe may take months or even years depend­ing on location, pricing and prevailing market conditions. During that waiting period, owners continue paying main­tenance costs while capital remains tied up.

Liquidity matters because unexpect­ed financial emergencies rarely wait for property transactions to conclude. Cur­rency uncertainty presents another layer of complexity.

Zimbabwe’s property market has increasingly operated in United States dollars, providing investors with some protection against domestic currency volatility. Strong diaspora remittances and foreign currency inflows contin­ue supporting demand in parts of the market, with some industry estimates suggesting diaspora buyers account for a substantial share of Harare property demand.

Yet investors would be naïve to ig­nore policy risk. Property values do not exist in isolation. They respond to tax­ation, monetary policy, infrastructure development, mortgage availability and broader investor confidence. Wealth preservation requires understanding these broader economic forces, not merely collecting monthly rent.

Another uncomfortable truth is that many Zimbabweans underestimate the importance of location.

Not every suburb will experience equal growth.

Infrastructure increasingly deter­mines investment success. Reliable water supplies, good roads, electricity availability, internet connectivity, prox­imity to schools and commercial activity all influence rental demand.

A beautifully finished house in an area plagued by water shortages or de­teriorating roads may struggle to attract quality tenants compared to a simpler property in a well-serviced neighbour­hood.

This explains why successful proper­ty investors spend as much time study­ing neighbourhood development plans as they do inspecting houses.

Perhaps the biggest shift required is psychological. Zimbabweans often treat rental property as a passive investment. It is anything but passive.

Successful landlords screen tenants carefully, maintain properties proactive­ly, keep accurate financial records and continuously improve their investments. They understand occupancy rates, rent­al yields and maintenance cycles. They budget for unexpected expenses before they arise.

In other words, they run rental prop­erty like a business rather than an inher­itance.

The country’s expanding informal economy also influences rental demand in unexpected ways. Warehousing, lo­gistics facilities and properties located near busy commercial hubs have in­creasingly attracted investor attention as economic activity evolves. Industrial and commercial property segments have shown resilience in certain locations, broadening investment opportunities be­yond traditional residential housing.

Technology is quietly transforming the sector too.

Digital property listings now allow landlords to market vacancies faster. Mobile money and electronic transfers simplify rent collection. Virtual proper­ty inspections increasingly assist dias­pora investors monitoring homes from abroad.

Information is becoming a competi­tive advantage. Investors relying solely on hearsay may find themselves paying inflated prices while data-driven buyers identify stronger opportunities.

Still, property should never become a family’s only investment. Diversifica­tion remains the oldest and perhaps wis­est principle in wealth creation.

A balanced portfolio combining property, productive businesses, finan­cial assets and emergency savings pro­vides greater resilience than concentrat­ing every available dollar into bricks and mortar.

Rental property works best when it complements other investments rather than replacing them.

Zimbabweans should also redefine what wealth through property truly means.

It is not merely owning several hous­es. It is owning properties that consis­tently generate positive cash flow, retain value, meet changing market needs and can withstand economic shocks.

An empty mansion produces no in­come. A fully occupied duplex may qui­etly outperform it year after year.

Perhaps that is the real lesson for to­day’s investors.

The conversation should move be­yond asking whether rental property is still worth it.

Instead, the better question is whether investors are approaching property intel­ligently enough to make it worthwhile.

Zimbabwe’s housing demand is unlikely to disappear anytime soon. Families will continue seeking homes. Businesses will continue requiring com­mercial space. The diaspora will contin­ue looking homeward. These structural realities continue supporting the long-term relevance of property investment.

But success will increasingly belong to disciplined investors rather than opti­mistic speculators.

Building wealth through rental in­come remains possible.

It simply requires something many people overlook in the excitement of buying a house: patience, sound finan­cial analysis, disciplined management and an understanding that property is not a guaranteed path to riches.

In Zimbabwe, as elsewhere, wealth is rarely built by owning property alone. It is built by making property work.

l Mhishi is the Principal Registered Estate Agent at HSP REALTY and can be reached on +263 772 329 569 or via email at leonita@hsp.co.zw