With real estate becoming the most preferred form of investment, it’s common to find people owning two properties, one of which is rented out. This provides both short-term and long-term gains to the owner. However, it’s important to bear a few things in mind while renting out your property.
- Fixing the Rent Amount: It’s easy to ascertain rent value for flats in an apartment complex, although flats in good condition and semi-furnished flats can command a premium. For independent houses, research the neighborhood thoroughly to arrive at the optimum rent.
- Advertizing the vacancy: While spreading word-of-mouth and having a ‘To let’ board on the property are time-honored methods, it’s better to advertize on online property portals to reach a wider audience and have more options for tenants.
- Background verification of the tenant: Unlike the past, a Police Verification of the prospective tenant is mandatory in most states. One could download the form from the internet, fill it out and submit it to the Police station under jurisdiction.
- Creating a Lease/Rent Agreement: It’s important to have a rent/lease agreement that clearly spells out dimensions and details of the property including fixtures, furniture and fittings, as well as the rent amount. One could add terms and conditions for rent payment as well as penalty clauses for delays, and damages to the property.
- Registering the Agreement: Registering an agreement makes it legally enforceable, and is mandatory in case the term of the lease is more than 11 months.
Remember, a home is one of those few assets that appreciate with time. Follow the above process and you can ensure you have the right kind of tenants who will maintain the home well and pay the rent on time.