Costs to consider when letting a place

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TheGuy

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I'm trying to figure out what is all the costs involved when you let a place to someone.

So far I have:

1. Bond
2. Insurance
3. Rates &Taxes
4. Levy if it's in a complex
5. Maintenance
6. Letting agent commission
7. Installation of prepaid electricity meter

What else is there?
 
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TheGuy said:
I'm trying to figure out what is all the costs involved when you let a place to someone.

So far I have:

1. Bond
2. Insurance
3. Tax
4. Levy if it's in a complex

What else is there?
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Tax? what tax? are you referring to rates and taxes?
maintenance and repairs. you can be sure that you will have to fix your place up at some stage or another.
 
Yes rates and Taxes.

Ok so if you put away say R500 a month for a 2x Bedroom Townhouse it should cover the maintenance when it's needed?
 
Ja, I'd add something on a monthly basis to the rent to cover maintenance issues when needed. You'll have months that go by without any maintenance necessary, but when a maintenance need does arise, it's incredible how pricey things can be.
 
Rodent-Boy said:
Ja, I'd add something on a monthly basis to the rent to cover maintenance issues when needed. You'll have months that go by without any maintenance necessary, but when a maintenance need does arise, it's incredible how pricey things can be.
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But big things like the geyser should be covered by the bond insurance. So it's only the smaller things that can break.
 
Water and Electricity unless its included in the levy.

Consider a gardener as well, as you can't rely on tenants to upkeep your garden if you have one
 
Legal fees if they don't pay their rent.
 
TheGuy said:
But big things like the geyser should be covered by the bond insurance. So it's only the smaller things that can break.
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Replacing cupoards/ washing lines/ fixing electrical faults/ repairing of electric garage doors/ plumbing issues/ repainting/ issues with damp...

These things are costly... and trust me, not all tenants look after places they are renting.
 
RustyPrincess said:
Water and Electricity unless its included in the levy.

Consider a gardener as well, as you can't rely on tenants to upkeep your garden if you have one
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Will make sure I find a place where it's included in the Levy. Electricity can be paid by the tenants.

Milano said:
Legal fees if they don't pay their rent.
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Thinking of going through a letting agent that insures against non payment.
RustyPrincess said:
Replacing cupoards/ washing lines/ fixing electrical faults/ repairing of electric garage doors/ plumbing issues/ repainting/ issues with damp...

These things are costly... and trust me, not all tenants look after places they are renting.
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Your right never thought of these things.
 
Letting agents usually either take 10% a month of the rent or take the first months rent as a finders fee and then about 7/8% for admin.
 
at what stage do capital gains tax and income tax get applied to your rental income?
i'm also considering fixing up my place, finding a new place and renting the old one out.
 
Capital gains tax only applies if you sell the property. The income you collect will be added to the income you already receive and you can deduct the bond costs. I'm not sure about the other costs but you can probably deduct those too.
 
rorz0r said:
Capital gains tax only applies if you sell the property. The income you collect will be added to the income you already receive and you can deduct the bond costs. I'm not sure about the other costs but you can probably deduct those too.
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So in the beginning it won't really make a difference to your tax as you'll be running at a loss because of the high mortgage?
 
So if you rent out a place you don't have to pay PAYE tax on the amount you receive from it?
 
phoneJunky said:
So if you rent out a place you don't have to pay PAYE tax on the amount you receive from it?
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You most certainly have to declare the income, but the bond and other costs should wipe out the gain and result in no income tax due.
 
Frankie said:
You most certainly have to declare the income, but the bond and other costs should wipe out the gain and result in no income tax due.
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So if you have a bond, but you live in the house with other people that live with you and pay rent, it works the same?
 
phoneJunky said:
So if you rent out a place you don't have to pay PAYE tax on the amount you receive from it?
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who are you renting to? one thing you have to remember here is that if you renting to a family member or friend, then you cannot claim any loss against your other income neither do you declare any profit on the rental income. but the capital gains tax rule still applies when you eventually do sell the property.
 
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