Lease Renewal Calculator South Africa
Should you renew your tenant or find a new one? Compare net income after vacancy, placement fees, and property prep costs
- No vacancy period — zero lost income
- No tenant placement fee (50–100% of monthly rent)
- No tenant screening costs
- No property preparation costs for showings
- Known tenant reduces maintenance surprises
- Continuity of lease terms (insurance, utilities)
- Potentially achieve full market rent
- Fresh lease terms with updated clauses
- New deposit at current market rate
Understanding Lease Renewal Decisions in South Africa How it works • Hidden costs • Legal terms
How to Use This Calculator
Enter your current monthly rent, the proposed renewal escalation (typically 5–12% in SA), and what similar properties are renting for in the area (market rent). Set the tenant's payment history — this is critical to the decision. The Renewal Decision tab shows the financial picture for renewal. Switch to Renewal vs New Tenant to compare net annual income after all turnover costs.
The Hidden Cost of Tenant Turnover
Many landlords focus only on the rent gap between renewal and market rate. The real question is whether a higher market rent justifies the total cost of finding a new tenant:
- Vacancy loss: 1–3 months of zero income while the property is advertised
- Placement fee: 50–100% of one month's rent (if using an agent)
- Screening costs: TPN credit check, reference verification, admin
- Property preparation: cleaning, minor repairs, paint touch-ups for showings
- Risk of bad tenant: unknown payment behaviour vs a track record you already have
A R1,500/month rent increase sounds attractive — but if it takes 2 months to fill the vacancy plus a R12,000 placement fee, you need 8+ months just to break even on the extra income.
Worked Example
Nomsa owns a flat in Sandton renting at R12,000/month. Her tenant's lease expires. She can renew at 7% (R12,840) or advertise at the market rate of R13,500.
If she renews: annual income = R154,080.
If she finds a new tenant: 2-month vacancy (R27,000 loss) + placement fee 100% = R13,500 + screening R500 + property prep R3,000 = R44,000 in costs. Net year 1 income = R162,000 - R44,000 = R118,000.
Conclusion: Renewal earns R36,080 more in year 1. At year 2+ the new tenant's rent advantage compounds — so the break-even is typically 2–3 years for a good market-rate jump.
Frequently Asked Questions
Does a lease automatically renew in South Africa?
No fixed-term lease automatically renews to a new fixed term — but under the Consumer Protection Act (CPA), if the tenant continues to occupy and pay after the lease expires, a month-to-month tenancy is created on the same terms. If an automatic renewal clause is in the lease, it must comply with CPA Section 14 (plain language) and cannot impose unfair terms. Landlords must give a minimum 20 business days notice before the lease expires to inform the tenant of their options.
What is a reasonable rent escalation at renewal in South Africa?
Most SA lease agreements specify an annual escalation of 8–10%, though current CPI (around 4–5%) means inflation-linked escalations of 5–7% are increasingly common and are more likely to retain good tenants. The Rental Housing Act does not cap escalations — the amount is agreed between parties. An escalation that pushes rent significantly above market rate risks the tenant leaving.
How much notice must a landlord give not to renew a lease?
Under the Rental Housing Act and typical lease terms, a landlord must give one calendar month's written notice of non-renewal for a standard 12-month lease. If the property is managed by an agent, the agent typically handles notice on your behalf. Month-to-month tenants require one full calendar month notice. Always serve notice in writing and keep proof of delivery.
Do I pay an agent fee when renewing with the same tenant?
This depends on your managing agent's mandate. Many agents charge a lease renewal fee of 25–50% of one month's rent for renewing with the same tenant (less than a new placement fee of 50–100%). Some full management mandates include renewals in the monthly management fee. Always check your mandate agreement before the renewal date.
Can I increase the deposit at lease renewal?
Yes, you can request an increased deposit at renewal to reflect the new rental amount — typically equivalent to 1–2 months' rent. Under the Rental Housing Act, the deposit must be held in an interest-bearing account, and the interest accrues to the tenant. Any increase must be agreed by the tenant and should be in the new lease agreement.