Frequently Asked Questions
About Property In South Africa

Address issues immediately, communicate clearly through a written notice of breach of contract. Give them 21 days to remedy the breach of contract.

Make sure to follow legal eviction procedures.

Consider landlord insurance to protect against loss of income.

Advertise on trusted platforms, screen tenants thoroughly with credit and reference checks. Request their bank statements to confirm a tenant’s affordability, healthy spending habits and cash flow.

If you’re unsure, work with a rental property agent.

You don’t need a deposit for a property. If you do, it gives you leverage to negotiate your interest rate. The bank can also grant a bond for less than the purchase price. In this case, you will need to pay the difference as a deposit.

The banks may require a deposit for investment properties.

Upfront costs include the deposit, bond and transfer costs. Ongoing costs include bond repayments, rates, landlord insurance, Home owners cover (HOC), maintenance, levies and property management fees.

Many of these are tax-deductible.

Most investors use a home loan (bond) to finance rental properties. You can also use cryptocurrency and existing assets (such as shares) as surety.

If you’re planning on getting a bond, have a strong credit score. Have a property deposit ready. Also, save up money for the bond and transfer costs.

You can get a loan for the bond and transfer costs, but it’s recommended to finance that yourself.

Risks include vacancy periods, unreliable tenants, unexpected maintenance costs, and changes in market conditions. Risks can be mitigated by screening tenants carefully, having landlord insurance and planning for ongoing maintenance.

Negotiate your purchase price according to the location, property condition, and potential expenses. Evaluate the property’s tenant demand, as well as its proximity to amenities and demand.

Always offer below market value.

You can buy a Lightstone Online Report. Alternatively, you can buy a Property24 report. These reports show a history of properties sold.

As a property owner, your rental income is taxable at your normal (PAYE) tax rate. As a company, it is taxed at 27% company tax. If your property is in a trust, then the 45% tax rate applies.

You can deduct expenses like bond interest, maintenance, rates and taxes. Ensure you declare all income to SARS to avoid penalties.

Yes, rental property can be a good investment. It is important to negotiate the best deal for you. Always use the right tools like tax breaks (Section 13sex), refinancing property and leveraging rental income to pay your bond.