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Stress-free renting written by Mir Jaffer Ali, published in The Tribune. July 7, 2017

Considering the contemporary trends in the Indian real estate market, rental demand has seen an upsurge across metros over the past few years. Escalating property prices have compelled prospective buyers to opt for renting as the best alternative. Thus, owners who are looking to rent out their properties must cash-in on this growing demand.

 

Remember, renting your home when the sale market is not in the best of health will not only fetch you extra money, but also keep your property in effective use. Moreover, the emergence of several property and rental management service providers have carved a niche for themselves by assisting owners in managing the complete rentals of their property right from finding tenants to documentation to move-in process to any repair work, etc.

 

However, it is important to keep some important points in mind before letting out your property.

 

At the onset, it becomes imperative for all property owners to spare some time, jot down preferences, consider legal issues involved and make appropriate strategy before finding and managing a tenant. By avoiding casual approach, you will surely benefit in the long run.

 

Final rental value: Check your expenses too

 

It is imperative to weigh the financial factors before really deciding on the overall rent value of the property. Besides considering the market value (the prevailing rent charges for similar properties in a housing society), you have to also consider the other expenses to be incurred, if any. These include the monthly spending on the services of a property management company, the usual wear and tear of the property even if the tenant is responsible, plus loan EMI, renting expenses, among others. All these expenses collectively will give you a fair idea about your overall expenditure.

 

Ready your property for rent

 

Once you have finalised the rental value for your property, prepare it for renting out. Install fittings and fixtures that will make your home more valuable.

 

Avoid spending too much on expensive features and fixtures because it doesn&rsquot necessarily increase the rental value of the property. It is important to clean and paint the property perfectly. Once done, it&rsquos time to either scout for tenants directly or via ads or agents. As soon as applications come in, don&rsquot run haphazardly. Meet and interview as many tenants as time permits, screen them intelligently and select the one you think is best to live in your property. You must verify the tenant&rsquos income source (the ID of the company he works for) or do a reference check to ensure your tenant is financially sound, reliable and a responsible citizen.

 

Proper documentation

 

An in-depth knowledge of the tenant laws of any city or state is a must to safeguard your interest. You must make it a point to have proper lease document on the government stamp paper that mentions all the clauses clearly and are duly signed by both parties involved (the tenant and owner) so as to avoid problems later on. The lease should clearly mention the notice period to evacuate the tenant, preferably 30 days and vice versa.

 

Also, you must list out all the fixtures and fittings that you are providing within the property. Clearly state that in case of any damage to anything within the property, the tenant must either get it repaired or pay for the same. Moreover, the document must also mention that at the time of tenant vacating the house, he must either get the house re-painted or pay for the painting. 

 

Having an appropriate legal document will not only safeguard your interest but will also forbid tenant/s from carrying out any unscrupulous activities.

 

Legal obligations: Mandatory things in the property

 

As an owner, you must clearly know the services you are legally obligated to provide. This will help you to avoid unnecessary expenses. Know that, legally, you are not bound to do cosmetic changes or repairs in the property that have least impact on the safe living conditions.

 

You can turn down expensive requirements by demanding tenants such as carpeting the entire house, window curtains, colouring with expensive paint, etc. However, there are certain mandatory fixtures that you need to provide.

 

Security deposit and lease signing

 

As an owner, you are also entitled to get a security deposit when you rent out a property. This deposit varies from city to city. When the tenant vacates the property, the security deposit must be given back to him/her within the time period mentioned in the agreement. It is advisable to check the property before returning the entire security deposit amount as the tenants may have damaged the property and you might need to deduct the amount from the security deposit.

 

In case the tenant is moving in, consult a lawyer to review the lease agreement to ensure it does not contain any illegal provisions. The lease should protect you from potential financial harms that tenant can make by exploiting loopholes in agreement. When sure everything is as per your expectations, meet the tenant personally and sign the deal.

 

&mdash The writer is founder and CEO, PropUrban