Your tenant pays R12,000 here’s how much a Johannesburg landlord actually keeps

Buying a property to let can look like a straightforward way to earn passive income, but the rent a tenant pays is not the same as the money a landlord pockets. Using a R12,000-a-month example, industry figures show routine costs and occasional expenses can substantially reduce take-home income.

Gross rent versus net return

Professionals who manage rentals in Johannesburg say gross rental yield is only a starting point. Operating expenses can account for around 35% of rental income, which on a R12,000 monthly rent could leave a landlord with approximately R8,000 to R8,500 after those costs are deducted.

What eats into rental income

The common deductions landlords should expect include:

• Levies
• Municipal rates and taxes
• Property management fees
• Insurance
• Utilities or other services, depending on the rental agreement
• Periods when the property is vacant

Maintenance and reserves

Maintenance is a recurring cost that can catch first-time landlords off guard. Industry guidance recommends setting aside a maintenance reserve. A common rule of thumb is about 5% of monthly rental income to cover painting, repairs and replacement of worn or damaged items.

Vacancy risk in prime suburbs

Even in sought-after Johannesburg areas vacancy can reduce annual returns. In some prime areas, including Sandton and the Northern Suburbs, vacancy rates are reported at about 4.5% to 6%. Spread evenly over a year, that level of vacancy equates to roughly 18 to 22 days without rental income.

Why high gross yield isn’t the whole story

Some parts of the Sandton market can show gross rental yields of around 16%, but experts caution that a high gross yield does not guarantee strong net returns. A property with a slightly lower gross yield but lower operating costs and steadier tenant demand can deliver better actual returns than one with higher headline yields and heavy expenses.

For prospective landlords, the lesson is to look beyond the headline rent and calculate net yield after realistic expenses, maintenance provisioning and expected vacancies before deciding whether a buy-to-let property will be profitable.