If you are planning to buy an apartment in metro cities or thinking of building a house and giving it on rent, then you can expect a regular income. However, is it easy to provide that property on rent? Well, there are many things that you need to consider before taking the plunge as renting a house is not a smooth sail. There are many potential concerns associated with renting a property. Some of the common concerns that you may face include, finding a new tenant, delay in rent payment, misuse of property by the tenant, the tenant refuses to vacate the house or doesn’t pay the maintenance on time. These are some issues, which often become a nightmare for the homeowner.
Before you take a plunge, here are a few things you should plan to avoid getting hassled later.
As you have a new apartment, you should know about the current rental rates in the area. You can go to different property consultants and take help of society maintenance office to be sure of the ongoing rents. Accordingly, you should price the rent competitively. If you are offering a fully furnished home or added some luxury features, then you can increase the rent proportionately.
Before giving the house on rent, you should get it insured. You will not be living in the house and will have minimal control. Thereby, it is imperative that you avail of house insurance with the maximum amount of liability coverage for the property.
Once you have obtained all the certificates of your property and have got the insurance, you can list it on different property sites and connect with local property consultants. It is easy to give the property on rent using either of these mediums. You can further have a better idea about the ongoing rents when you seek the help of local real estate agents.
After you find a new tenant, you should get a rental agreement drafted. All the details about the property, its usage, fixtures, maintenance fee and tenure among others should be clearly specified. It is essential to have the rental agreement drafted and registered. Once the contract gets written, you should get it registered, and the landlord should bear the registration amount and stamp duty charge. Sometimes, this registration charge can be paid by landlord and tenant after a mutual agreement. Besides, you should keep a close check when the existing lease expires and get it renewed on time.
Getting the police verification done of the tenant is vital. If you don’t get it done, then it is a punishable offence under section 188 of the Indian Penal Code. You can get the form from the state police department website and submit at the local police station along with identification proof of the tenant. After that, the local police will conduct the background check and provide approval on the rental agreement.
Along with these mandatory checks, the landlord must invest time and effort in conducting periodic checks ensuring that the tenant is not violating any terms and conditions of the agreement. It will also help in keeping the property safe. During your visits, if you notice any illegal activity or have any concerns with the way the tenant is keeping the house, you can raise a timely alarm. You can also make use of the clause in the agreement of giving a month’s notice and getting your home vacated.
Investing in real estate is a profitable proposition. However, it is by no means a passive process. As a landlord, you need to be actively involved, get everything done within the legal framework and make regular visits to your property to be sure. If, however, you live in another city, then ensure that there is a caretaker of your property who can carry out these essential tasks on your behalf. For a landlord, it is vital to acquaint themselves with the various intricacies in a rental situation to make the most of the investment.
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