Stepping into the rental market as a first-time property investor in 2025 offers significant opportunities, but it also comes with challenges. With evolving tenant expectations, an updated legal framework and increasing competition among landlords, success demands knowledge, preparation and professionalism. This guide is designed to help new landlords understand the current environment, legal obligations, and strategic considerations for building a thriving rental property portfolio.
READ: Tenant challenges: Key issues and tips
Understanding the legal framework
The foundation of a good landlord-tenant relationship is a clear understanding of South African rental law. The Rental Housing Act 50 of 1999 (RHA), with its amendments, remains the guiding legislation for residential renting in South Africa. As confirmed by Senior Legal Counsel at TPN, Rowan Terry, compliance is not up for negotiation.
Key legal obligations include:
- Written lease agreements: Required for all rental arrangements, clearly outlining rental amounts, deposits, maintenance responsibilities, notice periods and termination clauses.
- Security deposits: Landlords must place tenant deposits into interest-bearing accounts and return them, less any justified deductions, within 7 to 14 days after lease termination.
- Maintenance obligations: The landlord is responsible for ensuring the property is safe, habitable, and structurally sound. Urgent repairs must be addressed promptly.
READ: Here are 3 steps to help you resolve rental disputes
The Rental Housing Tribunal provides a free and effective forum for resolving disputes. However, prevention through compliance and good communication is the best strategy.
Financial planning
Being a landlord requires solid financial planning beyond covering the bond repayment on your investment property. New investors often underestimate the hidden costs involved with purchasing a property and renting it out.
- Rates, taxes and levies: These municipal charges must be factored into monthly budgeting.
- Insurance: Landlord insurance policies protect against tenant defaults, property damage and liability claims.
- Maintenance: Regular upkeep is crucial for protecting asset value and ensuring tenant satisfaction.
- Professional management fees: Many first-time landlords underestimate the value of working with a property manager to handle leasing, collections, inspections and legal compliance.
Tax obligations cannot be overlooked. Rental income must be declared to SARS, and expenses related to property management, maintenance and improvements may be deducted. Terry emphasises the importance of maintaining accurate records for tax and compliance purposes.
Tenant selection
Choosing the right tenant is one of the most crucial aspects of successful property investment.
- Screen thoroughly: Use credit checks, employment verification and previous rental references. A good tenant can make your rental experience effortless; a poor tenant can be costly.
- Be fair and non-discriminatory: Adhere to the principles of South Africa’s Consumer Protection Act and the Equality Act.
- Use a proper vetting process: A structured, documented approach protects landlords from claims of bias and supports sound decision-making.
READ: 8 costs that landlords often underestimate when setting expectations
Marketing and leasing property in 2025
The rental market has evolved, and so must landlords. According to our latest marketing insights, tenants are searching online more than ever, using mobile devices, and expecting rapid, professional responses.
To attract quality tenants:
- Advertise on a property portal You will need to create an account, and a fee will be charged for listing your property on each portal.
- Invest in professional photographs and listings: A well-presented property gets more enquiries.
- Price competitively: Research current market rates to ensure your rental is attractive.
- Highlight desirable features: Security, energy efficiency, fibre connectivity and modern finishes all appeal to today’s tenants.
READ: What to do if your tenants are not paying rent
Emerging trends landlords must know:
Several new dynamics are shaping the 2025 rental landscape:
- Energy-conscious rentals: Load shedding remains an unforeseen reality. Properties with solar installations, gas cooking or backup power solutions command premium rents.
- Flexible leasing options: With remote work being more common, tenants seek flexibility. Offering 6- or 12-month leases, furnished options or pet-friendly policies can widen your market. Make sure the property has a work station if furnished; if unfurnished, market a smaller room as a bedroom/home office.
- Compliance with POPIA: The Protection of Personal Information Act affects how landlords collect and store tenant information. Consent forms and secure data storage practices are now a compliance requirement that cannot be avoided.
There is a LOT to take into consideration. Partnering with a professional property management service like Just Property can make all the difference for first-time landlords. Our services are designed to minimise risk, reduce stress and maximise returns.
Becoming a landlord is an exciting and rewarding venture if approached correctly. Understanding your legal responsibilities, managing your finances prudently, selecting the right tenants, marketing effectively and staying ahead of market trends are key to success.
Your property is more than an asset – it’s a platform for long-term wealth creation. With the right approach, 2025 can mark the beginning of a prosperous investment journey.
READ: Is your lease agreement legal?
Tyson Properties share the following do's and don'ts:
Get the numbers right: Work closely with an experienced real estate agency to select a suitable property and then do your sums. The overall objective is to price your rental competitively after researching the market and area trends. Take into account bond repayments and running costs and even add a contingency to cover any potential maintenance. Factor in potential savings, including the new transfer threshold which enables investors to purchase a property under R1.21-million without paying transfer duties.
Focus on cash flow: Prioritise properties that generate consistent rental income, providing a potential financial cushion during downturns. Avoid over borrowing. Aim for lower loan-to-value ratios that reduce the risk of interest rate hikes.
Use an agency: Good vetting is vital and an agency is the perfect way to do this says Stephen Adamo, Tyson Properties rental manager for Cape Town’s Southern Suburbs: “Get them to do thorough credit and background checks and a move in inspection report, manage the property and even deal with maintenance and issue letters of demand if a tenant is a late or non-payer. That outsources the emotional connection to the tenant.” An agency will also provide a lease agreement that clearly outlines payment terms, maintenance duties, and rules.
Aim low: “In the current market, the numbers must make sense. A buyer needs to do a full due diligence before purchasing a property. When it comes to price points, you get an immediate return on lower end properties in good locations,” says Adamo.
Focus on location: Good quality tenants want to live in the right neighbourhoods, especially when it comes to amenities. Adamo says the rentals with proximity to top schools, shopping, restaurants, gyms and strong security are in high demand.
Be open to opportunities: Economic uncertainty can deliver foreclosures and motivated buyers who have the liquidity to snap up a bargain. Don’t discount renovating homes in good locations – often homes on the market need no more than a cosmetic upgrade.
READ: How to minimise the risks of rental arrears
Match tenants and lifestyle: According to Adamo, renting is the perfect way to adapt to changing lifestyle needs. Make sure your investment property meets general trends in a specific area - you don’t want to try rent out a one or two bedroom property in a family neighbourhood. Luxury properties are also rentable. Those looking to live in a R15 million plus property might wish to save on bond repayments of around R150 000 and instead pay a rental of around R50 000 to R100 000 to invest in other avenues.
Maintenance makes sense: A landlord who is invested in his property and has a good track record of looking after it and doing repairs within a reasonable timeframe always benefits. Adamo says tenants are happy to settle for a well maintained older property. Regular upkeep attracts and retains quality and long term tenants. So, conduct regular inspections and proactively ensure that all is well ahead of tenant alerts.
Consider Rental Insurance: Protect yourself from damages and loss of income.
Weigh up short term versus long term lets: Each have pros and cons says Adamo. Short term rentals might attract higher incomes over shorter periods but are extremely seasonal. In addition, larger numbers using a property during shorter times could mean more expensive wear and tear. Instead, investors can benefit from longer term rentals as they are stable and predictable.
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