It is a dream of most people to be homeowners at some point in their lives. For those select few to be fortunate enough to own two properties, it can serves as the road to financial freedom.
Becoming a landlord is a daunting step for some but if the correct processes are followed and adhered to, it can be largely rewarding. Whether the person you are renting to is a friend or complete stranger, it is best to cover yourself legally in case of any issues that might arise.
Gumtree outlines what exactly the advantages and disadvantages are of renting out your property:
This is perhaps the greatest advantage of renting out your property. If you are still paying an existing bond then the amount received from the rental effectively covers that payment if it is more than the bond itself. Additionally, the extra cash that is now available to you can also be used to square your debt faster.
Having a tenant in the property lets people know that there is movement and thus making it much less of a target for thieves and even vagrants who might’ve been on lookout for an ‘easy’ picking.
Late (or no) payments
This is one of the biggest fears of any landlord. A lease serves as a binding agreement between the two parties that states the terms and conditions, lease duration and rent amount. If, for whatever reason, the tenant is late with paying or doesn’t pay at all, it is the job of the landlord to enquire what the problem is. It is unlawful in terms of the Rental Housing Act (RHAct), and a criminal offence, for a landlord to cut supply of electricity or water, or to change locks, unlawfully seize goods, intimidate, or obstruct a tenant’s entry to the property in any way.
By renting out your home to a tenant, you will automatically be earning more per month and the guys over at SARS will immediately pick up on this higher tax bracket that you are in. What this essentially means is that you will be taxed on the extra income (received from the tenant) and pay additional funds to the revenue service each year.
Now that you’ve got the knowledge, it’s time to shop! Head to gumtree.co.za or your Gumtree app (click for Apple & Android) and don’t forget to use your location settings to find local service information close to home.