Becoming a landlord involves more than covering your bond. Proper budgeting and understanding of all expenses are crucial.

Key Cost Considerations

• Rates, Taxes & Levies: Include municipal and body corporate fees in your monthly budgeting.
• Insurance: Consider landlord insurance to cover tenant defaults, property damage, or liability claims.
• Maintenance: Regular upkeep preserves property value and ensures tenant satisfaction.
• Professional Management Fees: Property managers handle leasing, inspections, collections, and legal compliance — invaluable for new landlords.

Tax Tip:

Declare all rental income to SARS. Deductible expenses include maintenance, management fees, and improvements. Maintain accurate records for compliance.

Selecting a reliable tenant can make or break your rental experience.

Best Practices

• Comprehensive Screening: Conduct credit checks, verify employment, and review previous rental references.
• Fairness & Compliance: Follow the Consumer Protection Act and Equality Act to avoid discrimination.
• Structured Vetting: Keep documentation to support decisions and prevent claims of bias.

The rental market has become increasingly digital. Tenants now browse listings primarily on mobile devices and expect quick, professional responses.

• List on Reputable Portals: Create accounts and pay listing fees on trusted property platforms like Property Nest.
• Professional Photography: Quality visuals attract more enquiries.
• Competitive Pricing: Research market trends to set realistic rental rates.
• Highlight Key Features: Security, energy efficiency, fibre connectivity, and modern finishes are top priorities

Landlords must adapt to a fast-evolving rental environment shaped by new lifestyle and economic factors.

Key Trends

• Energy Conscious Rentals: Properties with solar power, gas cooking, or backup systems command higher rents.
• Flexible Leasing: Offer options like 6 or 12 month terms, furnished units, or pet-friendly policies.
• POPIA Compliance: The Protection of Personal Information Act requires consent forms and secure data handling for all tenant information.

Do’s and Don’ts for New Landlords

• Get the Numbers Right: Work with professionals to price rentals accurately, factoring in bond repayments, rates and maintenance.
• Prioritise Cash Flow: Choose properties that deliver steady income and avoid overborrowing.
• Use an Agency: A rental agency that offer vetting, lease management and legal issues removing emotional bias.
• Focus on Location: Tenants prioritise safe, amenity-rich neighbourhoods near schools, shops, and transport.
• Maintain the Property: Proactive maintenance retains long-term tenants and preserves value.
• Consider Rental Insurance: Protect yourself from financial loss or property damage.
• Evaluate Short vs Long-Term Lets: Short term rentals can be lucrative but volatile, longer term tenants offer stability.

Becoming a landlord is more than a transaction, it’s a journey towards building sustainable wealth. By mastering legal compliance, managing finances effectively, selecting quality tenants and staying informed on market trends, first time landlords can achieve both financial and personal rewards.

Your property isn’t just an asset, it’s the foundation for long term financial growth and with the right strategy, renting out your property could be the start of your most rewarding investment venture yet.

Before giving your property to an agent, ensure:

• The property is clean, safe, and habitable (Rental Housing Act requirement)
• All compliance certificates are valid:
  • Electrical Certificate of Compliance (ECOC) – required by law for any change of occupancy
  • Plumbing Certificate of Compliance (mandatory in some municipalities, e.g., Cape Town)
  • Gas Certificate (if applicable)
  • Electric Fence Certificate (if applicable)
• Repairs and maintenance are up to date
• Decide on inclusions/exclusions: e.g. Wi-Fi, furniture, services

You’ll need to sign a Mandate Agreement with the agency.

There are two main types of mandates:

• Letting Only Mandate
  • Agent finds a tenant, drafts the lease and conducts inspections.
  • You manage the lease thereafter.
• Full Management Mandate
  • The agency handles everything (tenant management, rent collection, maintenance, inspections, renewals).

This is the legal contract between you (landlord) and the agent. It must include:

• Property address and description
• Duration of the mandate
• Agent’s duties and responsibilities
• Commission rate and payment structure (usually 8–12% of monthly rent)
• How rent and deposits will be handled
• Notice period for termination of the mandate
• Handling of repairs, maintenance, and emergencies
• Confidentiality and POPIA compliance

Legal requirement:

All property practitioners must provide you with a written mandate (Property Practitioners Act, Section 68).

The agent will:

• Photograph and list your property on platforms like Property Nest or social platforms such as Facebook Marketplace, etc.
• Arrange viewings and handle enquiries
• Vet and screen applicants:
  • Credit and affordability checks
  • Employment and reference verification
  • Identity verification
• Present the best tenant options to you for approval

You can request to see the credit and reference reports before final tenant selection.

Once a tenant is approved, the agent drafts a Lease Agreement compliant with:

• Rental Housing Act (No. 50 of 1999)
• Consumer Protection Act (No. 68 of 2008)
• Prevention of Illegal Eviction Act (PIE)

A compliant lease must include:

• Full details of landlord and tenant
• Property description and duration
• Monthly rental and payment details
• Deposit amount and handling procedure
• Maintenance responsibilities
• Inspection clauses
• Termination and breach procedures
• Signatures of both parties

You should always receive a signed copy of the lease for your records.

By law:

• The tenant’s deposit must be held in an interest bearing trust account.
• The interest accrues to the tenant (Rental Housing Act, Section 5(3)(d)).
• The agent must provide proof of where the deposit is held and a statement of accrued interest upon refund.

Most agencies handle this through a trust account, which is regularly audited.

Inspections are legally mandatory at the start and end of every lease (Rental Housing Act, Section 5(3)(e)).

• Incoming inspection: Before occupation to record the property’s condition.
• Outgoing inspection: On or before the lease ends to assess damage and deposit deductions.

Both reports must be signed by landlord (or agent) and tenant.

• The agent collects monthly rent from the tenant.
• Commission and fees are deducted.
• The balance is paid to you, typically within 3–5 business days.
• The agent must issue monthly statements showing rent received, deductions and payments.

• The agent manages reported maintenance issues as per the mandate.
• You can set a maintenance limit (e.g. the agent can approve repairs under R1,000 without asking you).
• Larger repairs must be approved in writing.

• The agent should contact you 40–80 business days before lease expiry (Consumer Protection Act requirement).
• You can choose to renew, adjust rent, or terminate.
• If terminating, ensure written notice is given to both the agent and tenant.

If the tenant remains month-to-month, standard one full calendar month’s notice applies.

• Conduct outgoing inspection.
• Determine deposit deductions (if any).
• Refund balance + interest within 7–14 days.
• Provide final rent and expense statement.

Keep copies of:

• Mandate agreement
• Lease agreement(s)
• Deposit proof and statements
• Inspection reports
• Maintenance invoices
• All communication and notices

Agents must retain documentation for at least 5 years under PPRA audit regulations.

Key documents you will need

Relevant Legislation

• Rental Housing Act (No. 50 of 1999)
• Consumer Protection Act (No. 68 of 2008)
• Property Practitioners Act (No. 22 of 2019)
• Prevention of Illegal Eviction Act (No. 19 of 1998)
• POPIA (Act No. 4 of 2013) – for handling personal data

Tips for Landlords

• Always verify your agent’s Fidelity Fund Certificate (FFC) on the PPRA site.
• Review your mandate carefully, ensure termination terms and commission rates are clear.
• Ask for monthly financial statements.
• Stay informed, although the agent manages your property, you remain the legal property owner and ultimately responsible for compliance.
• Consider landlord’s insurance to protect against loss of rent or damage

• Research market rental rates in your area (use platforms like Property Nest/Private Property, or Gumtree).
• Decide on:
  • Monthly rental amount
  • Deposit (usually 1–2 months’ rent)
  • Lease duration (e.g., 6 or 12 months)
  • Payment date (commonly the 1st of each month)
  • Utilities responsibility (who pays what – Water, Electricity consumption)
  • Rules (e.g. pets, smoking, subletting)

You can advertise privately on:

• Property Nest and other platforms such as facebook
• Use clear photos and a detailed description
• Respond promptly and arrange viewings

This is a crucial risk management step:

• Ask potential tenants to complete a rental application form (you can easily find free templates online).
• Request:
  • Copy of ID or passport
  • Latest 3 months’ payslips
  • Latest 3 months’ bank statements
  • Proof of current address
  • References from previous landlords/employers
  • Self employed individuals you may want to financial statements
• Credit check: Use bureaus like TPN, Experian or TransUnion (you can sign up as a landlord)
• Only proceed once satisfied with their creditworthiness and reliability.

Your lease must comply with:

• Rental Housing Act (No. 50 of 1999)
• Consumer Protection Act (No. 68 of 2008) (for fixed term leases under 24 months)
• Prevention of Illegal Eviction Act (PIE)

Essential components of the lease:

• Names & ID numbers of both parties
• Property address and description
• Lease period (start & end dates)
• Monthly rental amount and payment details
• Deposit amount and interest handling
• Rights and obligations of landlord and tenant
• Termination procedures and notice periods
• Condition of property & inspection details
• Signatures of both parties

Tip: You can use a standard template from TPN, LegalWise or we encourage you to engage with an attorney for assistance.

In terms of Section 5(3)(e) of the Rental Housing Act:

• You and the tenant must inspect the property together before moving in.
• Record the condition of every room (photos + written notes).
• Both parties sign the inspection report.
• Keep a copy as evidence to resolve deposit disputes, later on the vacation of the tenant.

• The deposit must be held in an interest bearing account as per Section 5(3)(d) of the Rental Housing Act.
• Provide the tenant with proof of where the deposit is held and keep records of the accrued interest.

• Provide keys and a signed handover form.
• Keep written communication (email/WhatsApp) for all rental issues.
• Track rent payments and expenses.
• Respond to maintenance issues promptly (you’re legally required to maintain the property in a habitable condition).

• If it’s a fixed term lease, notify the tenant in writing at least 40 to 80 business days before expiry (CPA requirement).
• If not renewed, the tenant must vacate by the end of lease period date.
• If continuing month-to-month, both parties can terminate with one full calendar month’s written notice.

• Do this on or just before the tenant moves out (Rental Housing Act requirement).
• Compare to the original inspection report.
• Deduct costs for damages (beyond fair wear and tear) from the deposit.
• Refund the balance (plus interest).
• Within 7 days if no damages.
• Within 14 days after repairs if there are damages.

Maintain for at least 3 years:

• Lease agreement
• Payment receipts
• Deposit proof and interest calculation
• Inspection reports
• Communications and notices

Key Documents You’ll Need

• Rental Application Form
• Lease Agreement (Compliant with SA Law)
• Incoming and Outgoing Inspection Reports
• Deposit Receipt & Statement
• Proof of Compliance Certificates
• Notice Templates (e.g. rent increase, breach, termination)

Relevant Legislation Summary

• Rental Housing Act (50 of 1999) – main law governing residential leases
• Consumer Protection Act (68 of 2008) – applies to fixed term leases
• Prevention of Illegal Eviction Act (19 of 1998) – governs eviction processes
• Protection of Personal Information Act (POPIA) – when handling tenant data

Optional (but Smart) Additions

• Landlord’s insurance (covers rental loss, damage)
• Written house rules (e.g., noise, pets)
• Utility meters for water/electricity (to avoid disputes)
• Digital record keeping (scanned copies of all signed documents)