To rent out a property is an uphill task. Most people share the view that it becomes a headache in case it is not tackled properly. Common problems include searching for a new tenant every year, misuse of the premises by the tenant or his refusal to vacate, delay in payment of rent and non-payment of maintenance fee on time. Therefore, a property owner should engage a credible real estate agent who brings a suitable tenant after conducting a thorough background check and gathering substantial information about his previous relationships with other landlords in the city.
Any negative feedback should serve as a warning to stay away from such a tenant and avoid hassles later. Remember, you are renting out your property to earn a second income – not to increase your burden and ruin your peace of mind.
Fixing the rent of a Property
Ascertain the appropriate rent. In a competitive market, you cannot demand more than the prevailing market rate. Doing so weans away potential tenants. If your property is better maintained and well-furnished than what is available in the market, you can seek a premium. The rent is directly related to the capital value of the property. The annual rent is 3% of the capital value and differs according to the location and the amenities provided.
Advertising the property for Rent
vIt is a good medium because property hunters visit online to form an idea about rent and the type of properties available. The traditional and most preferred way is to approach a property broker. Monest gets you in touch with the top-rated agents in your city for property solutions of all kinds.
Most advertisements are placed by agents on behalf of their clients. This carries several merits. An agent gives personalised services to both the landlord and the tenant. He saves your time and effort by helping with the tenant’s police verification, preparation of lease agreement. All he gets for providing these valuable services is included in his commission: one month rent. Residential leasing is driven by local agents as they have complete information about the areas where they operate. Besides, if a local agent is involved, one can inspect properties instantly.
Preparation of lease agreement
A rent agreement is a legal dossier, which binds the landlord and the tenant to comply with the mutually-agreed terms and conditions. It is a vital document if a dispute arises between the two.
Utmost care should be taken while drafting this document. It should state the terms and conditions to avoid any dispute. Seek the help of a legal expert to draft the lease agreement. Try conducting a reference check and ensure that police verification is done.
These are the points one must pore over while framing the agreement:
1 Name, address, father’s name of both the tenant and the landlord should be mentioned.
2 It should be verified that the lessor is the legal owner of the property or a person duly authorized by him or a person authorized by a court to enter into such a contract.
3 The rent should be specified along with maintenance fee. The mode of payment, cheque or cash, the date of payment should be mentioned. Any interest to be paid in case of delayed payment should be made clear.
4 The period of tenancy should be mentioned. The security amount and the lock-in period are critical. How the amount will be refunded or whether it will be adjusted in the advance rent should also be mentioned.
5 Who will pay water, electricity and maintenance charges is important.
6 In case the property is furnished, a list of fittings and fixtures should be made and the penalty for damage decided in advance. The landlord should also check plumbing, electrical, sanitary fittings, and specify their condition in the agreement. Details of the condition of walls, ceilings, and rooftop should be mentioned so that there is no dispute over damage to the property.
7 The purpose of tenancy should be written – whether it will be used for a commercial or residential purpose.
8 The process for premature termination of the lease.
The landlord and the tenant can add as many conditions as they want.
If the property advisor brings a suitable tenant without putting you into any problem, then you are on the right path. If not then you can always look for a better option here on MONEST