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Useful Tips


  House Renting Tips

Renting out one's unoccupied property makes good business sense for most of the house owners. By renting out the property, one can generate a considerable amount of income, which can help in a number of ways, besides taking care of house maintenance expenditure. All these windfall notwithstanding, renting out their property has been a dreaded proposition for most of the house owners.

Most landlords generally shy away from renting their properties because of the general perception of bad tenant behavior. Besides the litany of bitter experiences of landlords, rent control laws favoring tenants also add to the woes of house owners. With various state rent control laws yet to be amended in order to be more equitable for property owners, an extra dose of caution is called for before handing over the rooms.

After homing in on a particular tenant, one should check out his background and his financial capabilities. Gather information about his employer/business and whether he is earning enough to pay the rental charges regularly. In case of companies, check their track record and reputation, what business they do, whether the society byelaws allow renting out for commercial purpose.

It is advisable to rent out properties for a short duration. While big corporates may prefer a three-five year lease, landlords usually prefer the relative safety of a leave-and-license agreement, which ensures periodic renewal of the terms. The eleven-month agreement is usually popular as these pre-empt the rent control laws, which apply after 12 months.

While drawing up the contract, one should take help of a legal expert and prepare a comprehensive agreement without any loophole. In the agreement, include the following: clauses specifying what are the charges, if not vacated when the contract ends; specify that subletting is prohibited under any circumstance; mention the period of notice to be given, in case of termination of agreement.

Even after all these preliminary steps, one should occasionally visit the house, to make sure the tenant uses the house properly for the specified purpose. At the time of vacating the premises by the tenant, ensure that the house is in proper condition and tenant has cleared all outstanding dues such as water, electricity, and society fees. Return the security deposit only when you are certain that all the dues have been cleared.

If renting the place to a foreigner, one needs to register with the Police Commissioner. In some areas, even for renting out to Indian citizens, one needs police permission.

 

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