Do you remember getting the keys to your first home?
For many people, that moment represents years of saving, worrying about bond approval and wondering whether they would ever own a place of their own.
Then came the furniture, the improvements, the birthdays and the ordinary moments that eventually made the house feel like home.
And then life moved forward.
Maybe you need another bedroom.
Maybe you are moving to another city.
Or perhaps you can now afford the home you originally dreamed of.
It's a reasonable question.
Your first home may indeed become the beginning of a property portfolio. But the fact that you love the property, or worked hard to buy it, does not automatically make it a good rental investment.
Your first home doesn't have to follow only one path.
The best choice depends on your finances, your next home and the future you are working towards.
A wonderful first home isn't necessarily a wonderful investment property.
When you bought your first home, you were probably judging it on how well it suited your life.
Could you afford it? Was it close to work? Did it have enough space? Did you feel comfortable there?
As an investment, it needs to pass a different test.
What rent could it realistically achieve? How much money would it require each month? Is there reliable tenant demand? How easily could you sell it later?
How much equity have you built up in your first home?
One advantage of having owned a property for several years is that you may have accumulated equity.
Part of your home-loan repayments may have reduced the outstanding capital. The market value may also have changed.
Your equity is broadly the difference between the property's current value and the debt secured against it.
In this example, the owner has R480,000 in gross equity before considering selling costs, other debts secured over the property, and any applicable taxes or adjustments.
If the owner sells, some of that value may become available after the transaction is completed.
If the owner keeps the property, that equity normally remains tied up in the asset unless it is accessed through a separate financial arrangement.
Read more about property ownership and financial performance in Is Your House Making You Money or Costing You Money?
Will the rent actually cover the cost of keeping your first home?
Suppose your first home could rent for R10,000 per month.
That sounds encouraging. The property might even generate enough rental income to cover the bond repayment.
But the bond isn't your only ownership cost.
In this example, the owner needs to contribute R300 per month on average before agency fees, tax and any expenses not included in the calculation.
The actual amount will vary. Maintenance and vacancy provisions are budgeting allowances, not necessarily expenses paid every month.
A bond repayment also normally includes capital repayment as well as interest. That matters when analysing long-term wealth, even though the entire instalment affects monthly cash flow.
Figures are illustrative only. This is a simplified cash-flow example, not an investment forecast or taxable-income calculation.
Explore the Rental NumbersCan you afford two properties at the same time?
This is where many first-home owners encounter a difficulty they did not initially anticipate.
You may be able to afford the new home comfortably if you sell the old one.
But keeping the first home could mean carrying two bonds, two sets of ownership expenses and two properties requiring maintenance.
It can also affect your ability to qualify for finance on the new property.
Your first home
Bond, rates, insurance, levies if applicable, repairs and possible vacancies.
Your next home
New bond, acquisition costs, insurance, rates, moving expenses and maintenance.
Lenders assess affordability using their own credit policies, your existing commitments and the information they can verify.
Before committing to a second purchase, confirm what your lender or bond originator will require and stress-test the combined cash flow.
What could keeping your first home achieve over time?
There are good reasons to consider retaining the property.
Rental income may help fund its ongoing ownership costs.
The outstanding capital on the home loan may reduce over time, provided repayments are maintained.
The property may increase in market value, although appreciation is never guaranteed.
You also retain the option of selling at a later stage or, subject to the tenancy and applicable law, possibly returning to the home.
For some owners, keeping the first home becomes a way to build a portfolio gradually rather than selling one property each time they buy another.
Selling your first home is not necessarily a missed investment opportunity.
There is a common belief that you should never sell property if you can possibly keep it.
That advice overlooks an important consideration: what else could the money achieve?
Selling may allow you to reduce the bond needed for your next home, eliminate expensive debt, improve monthly cash flow or avoid future repair and vacancy costs.
The sale may also make it easier to finance your next purchase.
Release equity
Use eligible net sale proceeds towards a deposit, reducing debt or another financial purpose.
Reduce borrowing
A larger contribution towards your new home may reduce the amount you need to finance.
Avoid future obligations
A completed sale can remove many ongoing costs and responsibilities of owning that particular property.
Gain flexibility
You may be able to pursue a different investment or financial strategy without holding two homes.
Renting out your former home could change its tax position.
This is particularly relevant when the property has been your primary residence.
Once you move out and begin letting it, the property may no longer qualify for the same tax treatment as a home you personally occupy.
Rental income generally needs to be declared to SARS. Certain qualifying expenses may be deductible, but capital repayments on your bond are not simply deductible rental expenses.
There is another consideration.
When you eventually sell a property that was once your primary residence but later became a rental, the capital-gains-tax treatment may differ from that of a property used entirely as your primary residence throughout ownership.
The calculation depends on the facts, relevant dates, ownership structure and any applicable exclusions or concessions. Specific temporary-absence exceptions may also apply.
Read SARS's guidance on rental income and primary residences and capital gains tax .
Would you buy your first home today as a rental investment?
This is a useful way to remove some of the emotion from the decision.
Imagine you did not already own the property.
Would its asking price, condition, rental potential and location make it attractive to you as an investment?
Or would you look for something with better rental income, lower maintenance costs or stronger tenant demand?
You are not compelled to retain a property simply because you already own it.
Keeping the first home means becoming somebody else's landlord.
You know your home.
You know which cupboard door sticks, which tap needs attention and how the neighbours behave.
But a tenant sees the property differently.
They are paying for the lawful use of a home and are entitled to expect the responsibilities of the tenancy to be properly managed.
You can manage these responsibilities personally, or appoint A+ Properties for agreed tenant-placement or management services.
Either way, the tenancy must be conducted fairly and lawfully, including proper deposit handling, screening, inspections and appropriate procedures when disputes arise.
What You Need to Rent Out a HouseAre you comfortable seeing somebody else live in your first home?
This may sound like an unusual question for a financial decision.
But for some owners, the emotional side of renting out a former family home is more difficult than expected.
A tenant may rearrange the garden, hang pictures differently or use the rooms in ways you never would.
Ordinary wear and tear will occur.
The property may eventually look different from the home you remember.
That does not mean the tenant is doing anything wrong.
If the answer is no, selling may be emotionally simpler.
If the answer is yes, you may find it easier to make fair, objective decisions about the tenancy.
You don't have to manage your former home entirely on your own.
Choose the level of involvement that matches your time, experience and preference.
Which option deserves serious consideration?
Renting is financially manageable
- There is realistic rental demand.
- You can carry normal vacancies.
- You have a maintenance reserve.
- You can still afford your next home.
- You want longer-term ownership.
The equity is more useful elsewhere
- Two properties would stretch finances.
- The rental return is unattractive.
- Major repairs are approaching.
- You need funds for the next purchase.
- You don't want landlord responsibilities.
Can you answer these ten questions about your first home?
Let the facts help you decide what happens to your first home.
The A+ Property Decision Score™ helps homeowners think through renting, selling, keeping or waiting.
It is intended to help you understand the considerations behind a decision, not to replace personalised financial, tax or legal advice.
Your first home deserves more than a standard sales pitch.
You worked hard to buy it. You should understand what keeping or selling it will actually mean.
A+ Properties assists homeowners with sales, rental assessments, tenant placement and ongoing management.
That means we can discuss both sides of the decision instead of treating every property as one that should automatically be sold or rented.
Our aim is to help owners make sensible decisions using information about the property, the market and their own circumstances.
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Add A+ Properties on Google →Explore the next step in your property journey.
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Why Buy Property as Soon as You Are Ready?
Explore the role of affordability, equity and time in residential property ownership.
Want to Rent Out My Property?
Follow the process from rental assessment and advertising to screening and management.
What Do You Need to Rent Out a House?
Check the essential preparations before placing your first tenant.
Tenant Placement vs Property Management
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More A+ Property Guides
Read practical advice for homeowners, landlords, buyers, sellers and tenants.
You don't have to sell it. You don't have to keep it. You do need to understand your options.
A+ Properties can help you understand your first home's potential sale value, realistic rental possibilities and the practical responsibilities involved in keeping it.
A+ Properties assists with property sales, rental market assessments, tenant screening, placement and ongoing management within its agreed service scope. Specialist tax, legal and financial advice should be obtained from appropriately qualified professionals where relevant.
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