Tips for buying a house first time?

EtienneK said:
I've just bought a house. Trust me, now is a VERY good time to buy! I got a 3 bedroom, 2 bathroom, 2 carport and garden home for R510k. I'm currently renting it out for more than what my bond repayments are.

Buy now! It's a good market!!
Click to expand...

I would really like to know how you go about renting out your house and how the whole process works. Do you have to pay some sort of tax after receiving rent moola each month from your tenant/s? How did you find your tenant/s? What happens if perhaps your tenant/s doesn't pay? Kick them out?
 
Json C said:
Do you think it would be a worthy investment? Fixing that up after it gets destroyed by the renters may turn out to be quite costly?
Click to expand...

If I can find a married couple - with a kid or two, who work and are good people - I would be happy. I don't (and will not) rent out to students or very young people, I would like to rent it out to a family that is planning on staying there for a few years, if not forever. :)
 
Sly21C said:
I would really like to know how you go about renting out your house and how the whole process works. Do you have to pay some sort of tax after receiving rent moola each month from your tenant/s? How did you find your tenant/s? What happens if perhaps your tenant/s doesn't pay? Kick them out?
Click to expand...

That probably depends on how you're renting it out. If you rent it out in your personal capacity it will be separately noted in your tax return (as rental income) and subject to tax. If you renting it out from within the structure of a company, company tax may apply on the "profits".
 
Sly21C said:
I would really like to know how you go about renting out your house and how the whole process works. Do you have to pay some sort of tax after receiving rent moola each month from your tenant/s? How did you find your tenant/s? What happens if perhaps your tenant/s doesn't pay? Kick them out?
Click to expand...

It's quite simple:
- You draw up a lease (there are examples somewhere on a .gov.za site)
- You advertise the property and find tenants
- You have to declare the rent you receive from the tenants on your income tax form when you do your tax returns and SARS tax you on it.
- If your tenant doesn't pay you're in deep **** and need to go through a long and lengthy process to get them evicted. You can't just kick them out - it's against the law.

I won't ever rent out a place - the pros just don't outweigh the cons.
 
Sly21C said:
If I can find a married couple - with a kid or two, who work and are good people - I would be happy. I don't (and will not) rent out to students or very young people, I would like to rent it out to a family that is planning on staying there for a few years, if not forever. :)
Click to expand...
Good idea - as long as you are near the property or have someone reliable near the property. Even wholesome "good" families go nuts sometimes!
 
Paul_S said:
It's quite simple:
- You draw up a lease (there are examples somewhere on a .gov.za site)
- You advertise the property and find tenants
- You have to declare the rent you receive from the tenants on your income tax form when you do your tax returns and SARS tax you on it.
- If your tenant doesn't pay you're in deep **** and need to go through a long and lengthy process to get them evicted. You can't just kick them out - it's against the law.

I won't ever rent out a place - the pros just don't outweigh the cons.
Click to expand...

Thing is - you build up a nice portfolio of properties - after a couple of years - it'll start paying your own bond :)
 
Quick question - do you pay transfer duty on the sale price or the bond registration price?

Just had a chat with my banker, and he said they can register the bond at 2.2m meaning I won't have to register a new bond - BUT - I won't have access to that amount until the value of the house is 2.2m - or I have some sort of other security?
 
xrapidx said:
Quick question - do you pay transfer duty on the sale price or the bond registration price?

Just had a chat with my banker, and he said they can register the bond at 2.2m meaning I won't have to register a new bond - BUT - I won't have access to that amount until the value of the house is 2.2m - or I have some sort of other security?
Click to expand...

http://www.sars.gov.za/home.asp?pid=192


3. On what value is transfer duty payable, what are the present transfer duty rates for individuals & juristic persons and as from when were the rates effective?
What value:
a) Where consideration is payable, the amount of that consideration.
b) Where no consideration is payable, the declared value, that is, the open market value.
Rate for natural persons:
0% of the value or said amount does not exceed R500 000-00;
5% of the value or said amount exceeds R500 000 but does not exceed R1 000 000-00; and
8% of the value or said amount as exceeds R1 000 000-00

Here's an example as well:

Example:
A natural person purchased a property for an amount R1 200 000. Transfer duty is calculated as follows:
R500 000 x 0% = RNil
(R1 000 000 - R500 000) x 5% = R25 000
(R1 200 000 – R1 000 000) x 8% = R16 000
Total = R41 000

I guess the value is the purchase amount and not the bond registration amount?
 
Last edited:
xrapidx said:
Thing is - you build up a nice portfolio of properties - after a couple of years - it'll start paying your own bond :)
Click to expand...

Like I've said: My house is already paying its own bond from month #1. This is a very good market and it's very easy to get specials where your bond repayments will be less than your rent income.

Free money FTW! :D

I saw another 3/2 apartment with a garden this weekend for R500k. You can easily rent it out for R5000+ p/m. There are specials everywhere. You just need to look for them.
 
Json C said:
http://www.sars.gov.za/home.asp?pid=192


3. On what value is transfer duty payable, what are the present transfer duty rates for individuals & juristic persons and as from when were the rates effective?
What value:
a) Where consideration is payable, the amount of that consideration.
b) Where no consideration is payable, the declared value, that is, the open market value.
Rate for natural persons:
0% of the value or said amount does not exceed R500 000-00;
5% of the value or said amount exceeds R500 000 but does not exceed R1 000 000-00; and
8% of the value or said amount as exceeds R1 000 000-00

Here's an example as well:

Example:
A natural person purchased a property for an amount R1 200 000. Transfer duty is calculated as follows:
R500 000 x 0% = RNil
(R1 000 000 - R500 000) x 5% = R25 000
(R1 200 000 – R1 000 000) x 8% = R16 000
Total = R41 000

I guess the value is the purchase amount and not the bond registration amount?
Click to expand...


Is this correct?

Shouldn't the transfer amount be R1 200 000 x 8% = R96 000?
 
marco79 said:
Is this correct?

Shouldn't the transfer amount be R1 200 000 x 8% = R96 000?
Click to expand...

No - he seems correct, worked it out on my loan:
R500,000 - R1,000,000 @5% = R25,000
R1,000,000 - R1,600,000 @8% = R48,000
TOTAL: R73,000

Which is what the lawyers said, then another R12,000 (with 20% discount) for their fees which comes to R85,000.

Then there's the banks lawyers for bond registration which is estimated around R10,000 - although they promised 50% discount

Total: R95,000 gone :( Thats a small car. :(
 
Hey guys, I came across this ...............


Repossessed houses for sale:

Faerie Glen, Pretoria - Lounge, Dining Room, 5 Bedrooms, 3 Bathrooms, Kitchen - R2 100 000

Willow Acres Ext 10, Pretoria - Lounge, Dining Room, 3 Bedrooms, 1 Separate WC, Kitchen - R1 100 000

etc....!!!

Are those the starting bidding prices? Or are they the final selling prices?
 
Last edited:
Be careful with auctions. I know with sectional title properties you are liable for oustanding levies which can sometimes be a large sum.
 
Re auctions. The prices on those are usually the market related prices. On auction once the property surpasses 60% of the listed market price, walk away. There are too many risks associated with that:

  1. The property is sold voetstoots, i.e. "as is"
  2. The property will in all likelihood be ill maintained
  3. The taxes and commissions payable is a large wack of cash
  4. Any outstanding fees will be for your account
 
Json C said:
Re auctions. The prices on those are usually the market related prices. On auction once the property surpasses 60% of the listed market price, walk away. There are too many risks associated with that:

  1. The property is sold voetstoots, i.e. "as is"
  2. The property will in all likelihood be ill maintained
  3. The taxes and commissions payable is a large wack of cash
  4. Any outstanding fees will be for your account
Click to expand...

+1

Auction Alliance charges 10% + VAT, payable immediately :eek:

And if you need to finance it, try to obtain pre-approval - you can't buy subject to bond approval. If you fail to obtain a bond they can still claim the auctioneer's cost from you.
 
You must log in or register to reply here.
Back
Top
Sign up to the MyBroadband newsletter
X