Understand the market

Before investing, research the local rental market. Understand the demand for rental properties, average rental yields and future market trends.

Location

Your property choice is crucial for maximising rental income. Consider location, the property condition and appreciation potential. Properties near universities, business districts and public transport typically attract higher demand and better rental prices.

Understand legal and tax implications

Stay informed about legal and tax requirements to ensure compliance and optimise returns. Consult a property lawyer if necessary, and learn about landlord-tenant laws, legislation and regulations. Understanding tax implications, such as rental income tax and capital gains tax, will help you to effectively manage your investment.

Property management

Efficient property management is key to maintaining property value and ensuring steady rental income. Decide whether you want to manage the property yourself, or hire a professional property management service. Good management includes regular maintenance, timely rent collection, and addressing tenant concerns promptly.

Our Tenant Profile Network (TPN) offers customers free access to and discounts on the following services:

• Residential lease pack
A comprehensive set of documents, including up-to-date leases (Absa customers receive 25% discount per pack).

• Investor report
Reports to inform investors of everything they need to know about a suburb’s rental market dynamics. It includes demographic information, a rental price index and rental good-standing indicators linked to a specific area (Absa customers get 25% discount per report).

Insurance and risk management

It’s essential to protect your investment with the appropriate homeowner’s insurance. In the event of death or disability, home loan credit protection can step in to cover monthly loan repayments for a limited period or to settle an outstanding balance in certain circumstances.

Financial planning and budgeting

Overall, effective financial planning is fundamental. When buying a home, it’s important to plan for more than just the deposit and monthly home loan repayments.

Knowing your numbers is the foundation of your success. Work out all potential costs, including utilities, monthly maintenance, levies (if applicable), purchase price, rates and taxes, monthly bond repayments and cash required for deposits, transfer duties, transfer fees and renovations. To estimate these costs, you can use Absa’s affordability calculator and the My Homeowner Journey tool – a free homebuying course that will teach you everything you need to know about buying your first home.