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bwn2pwn

Rental Property in SA to be sold ?

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bwn2pwn

Good day everyone,

 

I have a question with regard to having a rental property in SA, which has a tenant occupying it, and while still being bonded by the bank.
I have a rental agency managing the property, with tenants and a fixed lease that extends over a substantial period of time (indicating it will be occupied in the foreseeable future). Now I understand for the POF you have to have a net positive balance of accounts of around R200k. Bearing these two things into consideration, which is correct below:

a. Since I have a tenant, and a fixed source of income form the rental property, its perfectly fine to include this with a letter from the retnal agency and the lease agreement in the POF and it will be accepted by the immigration officers as POF despite owning a bond (monthly installments) on the property. The renal amount covers 90% of the bonded installment amount each month.

b. It doesnt matter if its occupied by a tenant or not, as long as its a liability on your account, and is still bonded, it will be counted as a negative. And will therefore have to be either sold off, or paid off before compiling your 6month POF to have a net positive balance.

 

I would appreciate any feedback on this guys!

As I really dont want to sell my rental property off, I only got it a few months ago, and wouldnt be able to recouperate most of my investment capital in terms of deposits etc if i sell it off so quickly

 

Regards!

 

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Jules

I’m not really following how a paying tenant changes your cash net worth on any given day. The tenant is paying monthly rent which boosts your monthly income but hardly moves the needle on your networth (the delta between your assets and liabilities). 

POF is more related to your net worth than your monthly income. 

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LidiaS77

Hi @bwn2pwn,

As far as I know neither a. nor b. is correct. If you look on the official Canadian immigration website you will see it says "Funds must be readily available to you. For example, you can't use equity on real property as proof of settlement funds.". Having a contract with someone that says that you will get money in the future does not mean that the funds are readily available to you. From what I've read and heard before having debt does not influence your proof of funds. The point is that you need to have that specific amount of money easily available to you e.g. in a bank savings account or similar with a bank statement that shows that amount. Also, you have to show 6 months bank statements but the full amount of money does not need to be in your account for the whole 6 months. You might have to explain where the money came from if it is one lump sum. This money can't be a loan and if it is a gift from someone you have to explain and prove this. This information comes from what I've read on forums before and not from personal experience. You could perhaps try to ask your question on the SACanada Facebook forum as well.

 

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