Buy-to-Let Bond Calculator
Analyze your investment property costs. Calculate your monthly repayment to determine the required rental income for positive cash flow.
Investment Property Glossary
- Negative Gearing
- When your property expenses (bond, levies, rates) exceed your rental income. You cover the shortfall monthly, but may benefit from tax deductions and long-term capital growth.
- Cash Flow Positive
- The "Holy Grail" of investing: when your rental income covers all expenses and leaves you with surplus cash every month. Often requires a 20-30% deposit.
- Capital Gains Tax (CGT)
- Tax paid on the profit when you sell the property. Unlike a primary residence (which has a R2m exclusion), almost all profit on an investment property is subject to CGT.
- Levies & Rates
- Mandatory monthly costs for Sectional Title units. Banks typically do not factor these into the bond repayment, but they are crucial for your net yield calculation.
Investor FAQs
Is bond interest tax deductible for investors?
Yes. In South Africa, the interest portion of your bond repayment is a tax-deductible expense incurred in the production of rental income. This deduction is highest in the early years of the loan.
What is a good rental yield?
In major South African metros, a gross rental yield of 8% to 10% is considered strong. However, many investors accept lower yields (5-7%) in high-growth areas where capital appreciation is the primary goal.
Should I pay a deposit on an investment property?
Paying a deposit (usually 10-20%) is often necessary to achieve a 'cash flow positive' status from day one, where your rental income covers your bond, levies, and rates.
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- Official Amortization Schedule
- Tax Certificate Format