With the rise of short-stay platforms, many homeowners are drawn to the appeal of attractive nightly rates and flexible short-term rental options. On paper, it might look lucrative, but in reality, it often involves greater risk, inconsistent occupancy levels, constant cleaning coordination, frequent guest communication, and increased wear and tear on the property.
As Adrian Goslett, Regional Director and CEO of REMAX Southern Africa, recently noted, “these rentals can be lucrative if positioned correctly, but they require a significant amount of hands-on management. Homeowners should approach this very carefully.”
Long-term renting, on the other hand, offers a very different experience. A standard 12-month lease typically brings better stability, more predictable cash flow, and far less day-to-day admin. Before you upload those listing photos and start picturing effortless passive income, it’s worth asking: Is this truly the right move for you?
If you are on the fence, we’ve broken down the good, the bad, and the legal realities to help you decide if long-term letting and stepping into the role of a landlord is the direction you want to go.
Long-term letting advantages
1. Financial relief (and then some)
The most obvious benefit is the income. Ideally, your rental income covers your bond, rates, and levies. Even if it doesn’t cover 100% of the costs immediately, it can provide significant financial relief. Over time, as you increase the annual rent and your bond balance decreases, that gap closes, and you start making a return on your investment.
2. Capital appreciation (the long game)
Also known as house price appreciation, capital appreciation happens when you hold onto a property instead of selling it immediately. Over time, the property could increase in value due to market growth, inflation, demand, and other economic factors.
3. Life flexibility
Perhaps your job transfer to Dubai is only for two years, or you want to test the waters in a new city before buying there. Keeping your original home gives you a safety net to always move back in later, sell it when the market changes, or convert it into a retirement space later down the line.
4. Added security
In many cases, it is simply better to have a tenant in the house than to leave it standing empty. While there is always a bit of risk in letting someone new into your property, leaving it unoccupied often comes at a greater risk and cost. A vacant home can quickly become a target for thieves, vandals, or squatters. This is especially true if you have relocated to another city and can’t regularly keep an eye on the place. Finding and securing the right tenant provides the added protection for the property and assists in maintaining it.
5. Your tenant could be your future buyer
If you decide to sell the property down the line, there’s always the possibility that your tenant becomes the purchaser. Often, tenants are renting while they save for a deposit or cover other transaction costs, making them the ideal buyer when you are ready to sell. In this rent-to-buy scenario, the rental deposit could even be used as part of the purchase deposit. It could also simplify the sales process since they already know and love the house.
What to watch out for
1. Cash flow disruption
If your tenant moves out and you can’t find a replacement for two months, you still have to pay the bond. The same applies if a tenant pays late,or in some cases, not at all. You need a financial buffer to carry you through these "dry" months with confidence, rather than stress.
2. Maintenance is your responsibility
That 10 pm burst geyser call? It’s yours. General wear and tear, painting, plumbing issues, and unexpected repairs can eat into your rental return. You’ll need to budget for this.
As Goslett advises, “Setting money aside in a contingency fund must form part of a landlord’s monthly budget. Knowing the numbers and budgeting for expenditure will ensure that money is allocated to where it needs to go.”
3. Your funds are tied up
If you need to use the money from selling your current home to buy your next one, whether for the deposit, transfer costs, or renovations, etc., then renting it out may not be practical. The funds tied up in your current home would need to be released to secure your new purchase.
4. The "risky" tenant
Everyone has heard tales of tenants who fall behind on payments, leaving homeowners and rental agents with sleepless nights. The reality is that both your tenant and agent will have a significant impact on whether your rental is a profitable and easy experience or a stressful one. That’s why every prospective tenant should undergo a thorough screening process before moving into your property.
If things do go wrong, the eviction process in South Africa is a long, complicated, and yes, expensive one. You can save a great deal of time, money, and drama by having the right agent by your side.
5. The long-distance challenge
Managing a rental property is a lot like a relationship, it is much harder when it’s long-distance. If you live in another city, you can’t just pop over to check on the property or handle the 10 pm emergency. It adds a layer of logistical stress that most people underestimate.
If you are not local, hiring a local property agent is the smartest move you could make. They have the expertise to vet tenants, sort out lease agreements, collect rent, and ensure the property is looked after, so you don’t have to drive 500km just to let a plumber in.
Responsibilities and the legal realities
Being a landlord comes with a laundry list of responsibilities:
- Lease agreements: These must be watertight and compliant with the Rental Housing Act and the Consumer Protection Act (CPA). A handshake deal won’t stand up in court.
- Safety and compliance: Is your property safe and secure? Does your property have insurance and a valid electrical certificate? Is the gas installation compliant? These are all your responsibilities to ensure your property is safe for tenants.
- Body corporate rules: If you are in a complex, you must ensure your tenant abides by the conduct rules and regulations.
- Tax: Yes, rental income is taxable, and you must declare it to SARS, although certain allowable deductions can reduce taxable income
There are far more responsibilities than those listed above, which is why preparation is key. Read our full guide to property rental responsibilities.
As Goslett advises, “It is possible for the endeavour to be financially rewarding, but it is vital to be fully aware of what it entails before taking the leap. Understanding what is involved and doing some research on the matter will put you in the best position to handle whatever may come your way, and increase the chance of making it a success.”
Setting yourself up for rental success
If the "risks" make you nervous (or even if they don’t), the solution is simple: Don’t do it alone. An experienced local agent is worth their weight in gold. They screen prospective tenants, handle the credit checks, draft the contracts, conduct incoming and outgoing inspections, and chase late payments so you don’t have to.
If you're looking for more information before you jump into the complex world of property rentals, read our Landlord's Guide.
