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Before You Rent Out Your Apartment To Tenant

Before You Rent Out Your Apartment To Tenant
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Real estate is rapidly growing at pace in India and value of property is getting increased in many part of cities. From the last decade, Indian property price has witnessed average rise of 14% annually. By keeping the pace with price rise, in the rental segment also witnessed much increase on the part of investors’ significantly.

If you own a property in Mumbai like metros, there is much chance to earn to decent cash as rent. It also depends on size of your Mumbai property and location exactly. Lot of potential investors not affords buying a home from rising property market ever; choose to go with the option of house a rent. With the present developments, sizeable number of house buyers rent out their homes for earning good return. There are several benefits you can earn from renting out your property:-

  • Healthy income in the form of rent
  • Tenant takes care of the property by paying along the rent
  • Standard deduction of tax of 30% from rental income for repair and maintenance is irrespective of actual amount you spend while that financial year.

While if you are planning to rent you’re house after knowing all these benefits, then there are few factors besides this income that is going to come your hand. First thing look for a good tenant either by placing an ad in newspaper, websites or seek referrals from friends and family. In either case, thorough background check is needed. Once tenant is fixed, draft a rental agreement in detail with specific clause included like tenor to any damages to termination of lease. This is mandatory to make short term agreement for preventing squat by tenants.

For NRIs apart from above said, turn their apartment into a corporate guesthouse can be better option.

Get the rental right

Even though the rate of rent is depend largely on demand and supply, it don’t effect directly on actual price of real estate Mumbai. Higher is the real estate price in India, rental yield comes from 2 to 3 % of the capital value of the property.

Beside this hard numbers, the key factors are location, connectivity to main city, any availability of social infrastructure, age of that property and many more are critical in the case of determining the rent for your house. As tenant becomes more selective, tidy and neat apartment can get fetched at higher rent than normal ones. Another sound knowledge is rental charged by similar properties in the neighborhood and community can also help.

Advertise it

First step you must take to rent out an apartment is by advertising it. Even though ads giving on newspaper are a traditional method for spreading the word, today era is of social media and websites go online to expedite your search. Otherwise ask for referrals from friends or relatives to find a potential tenant. You can also approach local real estate broker or agent to make a strong pitch for you.

Tricky part is picking out the right tenant. Do complete check of prospective tenant family background which is important for ensuring to get a clean deal. Well paid tenant seems to be ideal but it can’t be enough. Apart from usual set of tenant identity proofs, ensure to obtain other documents if he or she is new in that city or bachelors are the tenant:

  • Ensure the tenant is not got involved in any legal case
  • Obtain a letter from tenant’s employer to certify that he or she works there
  • Can ask for previous landlord if they have
  • Copy of permanent address

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