Things to keep in mind while renting out your property


  

If you are renting out a property for the first time, it can be a process that will bring with it a number of confusions and the fear that a tiny mistake can have serious repercussions if proper documentation isn’t in place. To make the process a bit easy and not so tiresome, we’ve listed out a few steps that you can take to safeguard your property while you rent it out.

Generally, when the property owners give out their property on rent, the dilemmas generally revolve around the amount of rent to be charged keeping the tenant’s ability to pay, verification tasks and registrations queries related to the lease agreement, lock-in period, security deposit, etc. Also, without due diligence, renting out a property can become a nightmare.

According to experts of the real estate industry, the most common problems that first-time landlords encounter after finding the right tenant for the property, are a delay in receiving rent, misuse of the property by the tenant, tenants refusing to vacate or denying to pay the maintenance fees (if the rental agreement requires them to).

Proper legal documentation is one of the basic and foremost important steps of renting out a property. In the absence of legal documentation, the owners expose themselves to risks such as violation of property by illegal means, unlawful activities owing to lapse in tenants’ background checks, and delay in the receipt of rent.



CALCULATION OF RENT AMOUNT
The experts suggest that the amount of rent is generally 0.8% to 1.1% of the property’s total value.
Other than this opinion by the experts, the location of the property and amenities being provided play a major role in determining the rental amount. For example, a property in an upmarket location will give you higher rentals, similarly, a fully furnished property will give you more rentals than a semi-furnished property. The rent may also be inclusive of the external charges, such as maintenance.

RENTAL AGREEMENT
The experts suggest that every rental agreement should be in writing and registered. It should specify the monthly rental amount, security deposit, and all the terms and conditions of the lease in detail. It should also mention who will pay for the utilities, water, and electricity, etc. The purpose of tenancy – whether the property is being used for residential or commercial purposes, should be clearly mentioned. Also, in case the rental agreement expires and the tenant and owner agree to extend the term of the lease, then, the extension should be in writing.

REGISTRATION OF THE LEASE AGREEMENT
Expert suggests that to make a lease agreement legally valid, one needs to register the document, under the Registration Act. According to the Transfer of Property Act, lease deeds that are made for a tenure of more than one year should be registered. Generally, the owners and landlords enter into a lease deed for 11 months with the option to renew it for another 11 months, if certain conditions are fulfilled. Such leases should also be properly stamped to avoid exploitation.


References: Media Reports, Economic Times, Press Releases




Disclaimer: This information has been collected through secondary research and Elite Landbase is not responsible for any errors in the same.

For More Details:-
+91-97161 11107
7th Floor, Golf View Corporate Tower
Golf Course Road, Gurugram, 
Haryana, India

Comments

Post a Comment

Popular posts from this blog

Architecture - Contemporary Vs Modern

Image
Two words that you must have heard in terms of the architecture of the upcoming developments are - “modern” and “contemporary”. While a lot of descriptions for various beautiful residences use these two words in their advertisements, a large mass of audience doesn’t really know what exactly do they mean and how they are different from each other. Even though the words are used on a regular basis and are thought of as the same, there are certain elements that differentiate them from each other. Below are some details about the two that will help you better understand the terms “modern” and “contemporary”. Read on! Basic difference Simply, modern architecture is a type of style that was originated between the early years of the 1900s to 1950s and hasn’t changed for a long time. It is a much-defined style with minimal changes over time, hence when you claim a house to be built in “modern” style, however, it’s different in terms of architecture. Against this, pinpointing...
Read more

Moving towards water security – The need of the hour

Image
Around 80% of the world’s population suffers a severe threat to its water security. 783 million people do not have access to clean and safe water worldwide out of which, 19% of world’s people without access to clean water live in India. Come summer and hue and cry above water availability becomes breaking news in Gurgaon. People become highly dependent on water tankers and illegal bore wells, exploiting groundwater tables that are already depleting at an alarming rate in the city.  Further, the effects of climate change on water availability has become more apparent in recent years. The rising mercury level and the water scarcity compound the hardship faced by Gurgaon citizenry. The city is growing by leaps and bounds and with fast pace urbanization, the importance of water as a scarce resource is gaining a strong foothold not only in the residential spaces but also in the commercial setups.  Founder, Elite Landbase , Navdeep JP Sardana says, “Water being a natural re...
Read more

Investor Confidence Rises in the Realty Sector in India

Image
Investor confidence rises in the realty sector in India as they pump in a record $2.5 billion or Rs 17,600 crore in the first quarter of year 2019. This is recorded as one of the highest first quarter inflows since 2008. The upward movement is supported by the regulatory changes in the sector like RERA, GST and Demonetization and the launch of the first ever REIT (Real Estate Investment Trust) in India, which has given an unprecedented boost to the investors’ confidence in the market. The first REIT listing, during the quarter (Jan-March 2019), by Blackstone-backed Embassy Office parks to raise Rs 4750 crore was well received with an over subscription of 2.57 times. This has opened doors for the retail investors to invest in the real estate. REITs are like mutual funds for the real estate sector. They collect funds from investors and put the money into real estate. The returns they earn from rental income and sale of property is distributed as dividends to investors. So ret...
Read more