I am not sure if I should sell the one that I am staying in now which is worth R560 000 or rent it out for a while (two years) and sell it then. I will definitely have to subsidise the rent and pay the levy since it is a townhouse. What advice would you give me?

Answer:
You need to consider the following:

Your ability to afford both properties.

I assume the bank has already granted you a bond for the second property, which they would not have done if they considered you were overstretching yourself. Generally, banks stipulate that no more than 30 percent of your income should go towards paying the bond.

Whether property prices are likely to rise

The property market is generally considered to be slowing down and stabilising. However, property prices only very rarely actually lose value. Also, the property market is very fragmented. You may be in an area which will experience high growth going forward. Generally, the inner city / CBD and lower-income areas, in Johannesburg at any rate, are expected to increase rapidly in value, while the top end has stabilised substantially. Will your first property increase in value to such an extent that it's worth holding on to it for the extra two years?

Letting your first property

Will it be an easy property to let? Is there high demand in that area / complex? You will also need to factor in a vacancy period in case you are not able to get a tenant right away. Will you be able to afford the bond in that case?

Since you would be making a loss, you probably wouldn't need to worry about tax. However, you would be liable for capital gains tax when you sold it later on, as it would no longer be your primary residence. My personal opinion, though, is that you should not choose an investment solely because of the tax consequences. If you'll make more money that way, then it's worth paying the tax.

You could sell the first property for R560 000, which would allow you to pay cash for your second property

This would mean that you would have no home loan debt at all, which is a fantastic position to be in. Since you would also have around R140 000 left over, you could use this to pay off any other debt you may have (which is always recommended) and put the remainder into other investments, eg, retirement savings, stock market etc. But consider that your first property also acts as an investment. If it's worth R560 000 now, it may well be worth R600 000 in two years' time. You would also be able to deduct the bond as a business expense for tax purposes.