Things to Know Before You Give Your “House on Rent”
You might own a property/house which is not in use since a long period of time. So, in most cases you might think to give that house on rent so that it is in continuous use and maintained and generates a fixed side income every month though might be less. But do remember that it is not quite easy to give house on rent as it appears to be. Listed below are the various points you need to keep in mind before giving your house on rent.
Points To Consider While Giving Your House on Rent
01. Decide The Purpose
- First of all, for what purpose you are giving it on rent should be decided.
- You need to also know the purpose for what the tenant is going to use your property.
- If there is any society association or community of residential complex, whether they allow the tenant to use premises for other purposes such as coaching centers or not.
02. Decide the Rent Amount
- It is very important to find out the prevailing market rental rates of the house/property similar in size and in locality like yours before deciding the rent amount.
- Then on basis of that you can quote and charge the rent for your home.
- The aspect whether your house is unfurnished, semi-furnished or fully furnished also affects the rent rate of the house.
- It is obvious that unfurnished flats or house will fetch lower rent while fully furnished will fetch higher rent.
- Also, the amenities provided in the rental complex add up to the rent amount. Also clarify as to whom the amount will be paid(if any).
- Hence, you need to know all these factors in order to decide the rent amount.
03. Advertise your Residential Property
- In order to find the potential tenants or those who are in need of the house on rent, it is necessary to advertise your residential property like all service providers and sellers do.
- There are various ways to do this task. Online portals and advertisements will be of great help in this case.
- Those not quite familiar with this online advertising can publish an advertisement in the local newspapers.
04. Approach local real estate broker/agent
- You can also approach the real estate broker/agent in search of the potential tenant for your house/property as well as the further processes and formalities related to it.
- They may also help you in deciding the potential rent amount to be charged and advertise your property.
05. Tenant Segment
- To whom you want to give your house on rent- whether corporate, individuals or family – is also needed to be kept in mind.
- In large cities owners prefer corporate tenants over families or individuals because they pay good rent, payment is usually on time and agreement is long term around 4-5 years and you do not loose rent for “not in use” periods.
- But the corporate demand for the furnished dwellings and would also bargain hard on the annual increase as they sign for a long-term rent period generally 3-5 years.
- In terms of duration, it is risky to give apartment/flat on rent to the individuals than families because the agreement is usually for shorter period of time (11 months).
- If we think of capital inflow, individuals will help you in fetching better rent than families would pay.
06. Police Verification of Tenant
- While giving your house on rent, it is necessary for your safety as well it is legal and statutory to have the police verification of the tenants done.
- The house owner is required to fill the verification form and submit it to the local police station with the governmental issued identification proof of the tenant.
- To ensure that your premise is not misused or used for illegal purposes, you should keep an eye from time to time.
07. Discuss Dos’ and Don’ts
- Do discuss your terms and conditions with your tenant clearly i.e. what is permitted and what is not permitted before giving your house on rent.
- For example, if you don’t want your tenant to keep a pet or play loud music in late nights.
08. Draft a Rent Agreement
- When all the process above is finalized,a rent agreement is must in this case.
- Your rent agreement should have all the details including the lease term, monthly rent, permanent address of the tenant and the security deposit.
- Terms and conditions regarding other expenses like electricity bills, other repairs and maintenance charges & charges to the society/apartment’s owners’ association or communitycharges(if any) should be mentioned in the rent agreement.
- Expiry date of lease also need to be mentioned along with the clause for extension of this lease.
- Line of action in case of default in payment of rent or misuse of property or breach of an agreement.
09. Register the Rent Agreement
- It is beneficial to get your rental agreement registered as it becomes valid and remains enforceable giving you remedies in case of breach. In case of any legal dispute or quarrel between tenant and landlord, it is considered evidence and a basis in the court.
10. Ask for Security Deposit
- It is the important means through which your property is protected while you give your house on rent.
- So it is necessary to take a specific amount as a security deposit.
- It assures that when your tenant vacates your place, it is left in good and proper condition i.e., in the same state or condition which you had given.
- The amount can be used for the repair and maintenance works required for your rented house.
- As the name suggests, if the tenant leaves/runs away without informing you it is a security for you.
These were the points which need to be kept in mind while giving your house on rent. Hope this article would have provided you the knowledge regarding it. If you think some points have been missed out or you have more points to suggest, please do share it with us in the box given below.
Hoping for a good and responsible tenant for your house on rent!!!