Selling, investing way to go

QUESTION: A READER WHO BOUGHT A HOUSE IN 2019 ASKS: SHOULD I SELL OR RENT IT OUT?

- Pedri Reyneke

The question: I am a 35-year-old man who bought a townhouse in mid-2019 for R899 000 in a decent suburb that is part of the older Pretoria East. Attorney fees cost R35 000 and I had some upgrades done to the value of R50 000.

It was used as my primary residence for about two years before I rented it out. The bond has since been settled with the bank, and I have the title deed in my safe.

After some thought, I wondered if it was still worth it to keep the property and rent it out or sell it and invest the money.

The estimated property valuation is around R1 035 000.

Should I sell through agents, pay commission, have some painting done and pay certificate of compliance costs, I will be left with around R975 000 to invest.

This is a sad number, as I don't break even once I factor in the upgrades done to the property as well as bond and attorney fees upon purchase.

Here is where I need some help: The rental income is R8 625 per month:

►Agent fees: R518pm;

►Rates and taxes: R478pm;

►Levies: R1 850pm; and

►Electricity: (prepaid; for tenants' account).

This leaves me with a net amount of R5 779 pm that is added to my gross salary and fully taxed.

Property experts claim the average house price growth in Gauteng is 3% a year.