Maximizing ROI: What Every Landlord Should Know in 2025

If you’re new to property investment, you might hear the term ROI a lot. Simply put, ROI means Return on Investment — the profit or benefit you get from your investment compared to what you put in. For landlords, ROI is the rental income you earn minus all your costs (like mortgage payments, maintenance, taxes, and management fees).

Maximizing ROI means making smart decisions that increase your income and reduce your expenses, so your property works harder for you.

The rental market in South Africa is shifting — tenants are becoming more discerning, operational costs are rising, and expectations around service and quality have never been higher. In the middle of all this is one clear truth: if you want to get the best return on your investment, you need to manage your property like a business.

But that doesn’t mean being distant. It means being strategic, proactive, and professional. Whether you own one flat or an entire portfolio, here are some thoughts that may help you improve your yield while also creating better living experiences for your tenants.

Think Long-Term, Not Just Month-to-Month

Filling a vacancy quickly is important, but property investment is a long game. Every choice—from who you rent to, how well you maintain your property—affects your returns. Well-managed, well-maintained properties command better rent, attract quality tenants, and keep vacancies low.

Don’t Underprice — It Costs More Than You Think

Lowering rent to attract tenants faster might seem smart at first, but rentals priced too low often lead to poor living conditions. With insufficient funds to maintain the property, issues like peeling paint, plumbing problems, and general neglect quickly add up. This reduces the property’s value and eventually costs you more.

Charging fair market-related rent gives you the breathing room to fix, maintain, and upgrade. It’s not about charging the highest rent—it’s about charging the right rent.

Strategic Upgrades Make a Big Difference

You don’t need to overhaul the entire property, but small, intentional improvements can go a long way:

• Prepaid electricity and water
• Built-in cupboards and kitchen storage
• Energy-efficient lighting and geysers
• Fibre-ready internet
• Secure parking or access control

These features reduce complaints, keep tenants longer, and allow you to justify fair rental increases when the time is right.

Prioritize the Tenant Experience

Good tenants stay longer, pay on time, and respect your property. They’re attracted by more than just price—they value responsive communication, timely maintenance, and clear lease terms.

Simple gestures, such as periodic inspections and renewal incentives, demonstrate professionalism and build trust, turning tenants into long-term clients.

Review Your Rent Annually

The rental market shifts constantly. If your rent hasn’t changed in years, you may be losing out—especially in sought-after areas like KZN’s North Coast. At the same time, don’t push rents so high you invite vacancy.

Benchmark your rental against similar properties regularly. At Prestige Real Estate, we provide accurate market valuations to help landlords stay competitive and profitable.

Track Expenses & Claim Smartly — Know What SARS Allows

Managing expenses carefully is key to understanding your true ROI. Many landlords miss out on tax benefits because they don’t keep proper records or aren’t aware of deductible expenses.

In South Africa, SARS allows you to deduct many costs related to producing rental income, including:

• Rates and taxes (municipal charges)
• Levies (for sectional title units)
• Repairs and maintenance (not improvements)
• Insurance (building and contents)
• Bond interest (interest portion only)
• Agent commissions and management fees

Remember: Improvements like building a new room are not deductible, but maintenance such as fixing leaks is.

Consider Professional Management

The reality is, managing property well takes time, structure, and consistency. From thorough vetting and lease drafting to handling disputes and maintaining compliance, there’s a lot that goes on behind the scenes.

Working with Prestige Real Estate means your investment is managed professionally, protecting your income and saving you time.