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Rent vs Sell

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Super Contributor
...that's a more positive reaction.
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Personally, I would sell. Renting only really works if SARS will let you offset the interest on the bond, but SARS won't offset interest from one property against a bond on another (I don't think?). So if they determine that your loan is for the new place you are living in, I am not sure they will like it. They would probably not notice, but if they do, your entire investment strategy is put at risk
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Super Contributor
Here is a site to play around with http://www.property24.com/calculators/bond . Illustration: New place costs R1.3, at 9.34% over 20yrs, actually costs you R2.876 mil (interest R1.575 mil). If you put R600 000 deposit from sale of your unit, You pay R1.548 mil (interest R848k) instead - Saving R727k over that period (presuming rates etc remain the same). Your repayments went from close to R12k, to R6.5k so you have more monthly disposable income too. On the other hand, if you rent the other place out you will maybe get R5500, there are still upkeep costs, and risk of tenants that don't pay. Lets assume you are lucky and get consitent R4500 net to put into your new bond. You will reduce your payment term from 20 years to only 10years and save R850k in interest (all things out of your control falling in your favour that is). Consider also the tax penaties - CGT when you eventually sell the other unit, plus likely paying tax on the interest income. Just saving the stress on managing the extra unit alone is worth at least R1000/m - lol.
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Super Contributor
On the corner of Sandton and Rivonia there is a guy who sells the usual range of stuff( has a blue bulls shirt on usually) but once when I was backed up in traffic we started talking and I found him to really be a mine of information about investment in general - you can't miss him - I would seek out his advice if i were you.
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Frequent Contributor
Smooth one - Partridge (Like!!)
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