Tips for renting out a flat

azbob said:
So rather let the tenants deposit the rent to your pensioner mother then?
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I am sure this is within legal framework although if I was the one doing it, I would have a contract between the mother & tenant.
 
3WA said:
Unless you’re running at a loss, then you want the biggest % back.
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surface said:
I am sure this is within legal framework although if I was the one doing it, I would have a contract between the mother & tenant.
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Actually thinking about this now, SARS will probably moer you if the property is registered to you and your mum is getting the rent.
 
3WA said:
Actually thinking about this now, SARS will probably moer you if the property is registered to you and your mum is getting the rent.
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Indeed they would. It would be taxed in your hands and there could be donations tax implications too, obviously depending on the quantum of the rental.
 
vigras rojara said:
Indeed they would. It would be taxed in your hands and there could be donations tax implications too, obviously depending on the quantum of the rental.
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3WA said:
Actually thinking about this now, SARS will probably moer you if the property is registered to you and your mum is getting the rent.
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Ok so just take rent in cash then?
 
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3WA said:
No story, I've just always thought that if things go awry and my tenants stop paying, I'd move in with them and be insufferable until they move out. Best if they can’t shoot me.
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This would be illegal. You'd be trespassing. I know that as stuffed up as it seems, once the tenant is in, they are in. That's why it's very important to have well-vetted, decent occupants.
 
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The Darkness said:
This would be illegal. You'd be trespassing. I know that as stuffed up as it seems, once the tenant is in, they are in. That's why it's very important to have well-vetted, decent occupants.
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Indeed. It's based on a principle in contract law that says that one breach of contract doesn't condone another.

Which is why suggestions of front door removal etc are also somewhat misguided.
 
3WA said:
Actually thinking about this now, SARS will probably moer you if the property is registered to you and your mum is getting the rent.
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Think about how this would be discovered by SARS. There are 2 likely scenarios:

1) For whatever reason the pensioner mother is subjected to a random audit, and questions are asked about the money being paid into her account and why it doesn't correspond to her declarations in her annual tax return. She can then either suck it up and pay the penalties for underdeclaration, or she can sing like a canary and implicate her child in this scam to evade tax and the whole thing unravels into a messy full-cavity audit of both of them.

2) SARS checks the deeds registry and sees that the owner owns more than 1 property, yet they don't see any declaration on their annual income tax return of rental income. Now obviously there are many valid reasons why you might own an extra property and not generate any income from it, but the burden of proof will be on you to prove that you don't rent it out and generate income from it.
 
deweyzeph said:
questions are asked about the money being paid into her account and why it doesn't correspond to her declarations in her annual tax return.
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In my scenario the mother would be declaring it and paying tax on it.

Also, what would happen if you just hire your mother, pay her a rental management fee, and let her pay tax on that at her rate, while deducting her earnings from your rental income at your rate?
 
3WA said:
In my scenario the mother would be declaring it and paying tax on it.

Also, what would happen if you just hire your mother, pay her a rental management fee, and let her pay tax on that at her rate, while deducting her earnings from your rental income at your rate?
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I don't know. Both scenarios seem kind of dodgy. You would probably get away with it, but personally I like to sleep at night, and that would keep me up.
 
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vigras rojara said:
Haha!
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It's not my fault the supplier delivered the paint 1 week late, and then the wrong paint, and then the wrong colour. Then my bakkie had an alternator problem, and I could not buy a new one, because I was short of my rental income, so I could not transport the freshly painted door. Now if I can only scrape together some petrol money next month (hopefully my tenant will pay the outstanding rental), I will be able to hang the door.
 
RonSwanson said:
It's not my fault the supplier delivered the paint 1 week late, and then the wrong paint, and then the wrong colour. Then my bakkie had an alternator problem, and I could not buy a new one, because I was short of my rental income, so I could not transport the freshly painted door. Now if I can only scrape together some petrol money next month (hopefully my tenant will pay the outstanding rental), I will be able to hang the door.
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Sounds credible!
 
3WA said:
In my scenario the mother would be declaring it and paying tax on it.

Also, what would happen if you just hire your mother, pay her a rental management fee, and let her pay tax on that at her rate, while deducting her earnings from your rental income at your rate?
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I suppose rental management fees doesn't exceed a standard 10% of rental, you should be fine. I wonder if they would audit/notice if you give above 50% of rental as "fee" though.
 
azbob said:
So rather let the tenants deposit the rent to your pensioner mother then?
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So how old you have to be to hold a title deed ?

Could one not purchase the house in their kids name then put the rental income into their account....?
 
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