Our elders would say that having a house on rent with a regular income is like having a son. However patriarchal this may sound, renting out a home can offer a steady stream of income and help pay off your mortgage, or make use of an unused property. But being a landlord is not easy. It comes with its share of challenges and responsibilities as well. Sometimes, you don't find a suitable tenant, another instance where a broker will give you a tough time, or worse, you don't receive rent on time and the tenant denies vacating the house. The challenges are many. From legal obligations to choosing the right tenant, the decision you make before handing over the keys can make or break your experience as a landlord. If you are thinking of leasing your home, it's important to go beyond the basic idea of 'finding a tenant and collecting rent'. Here are some basic things you need to know:
Know Your Legal Responsibilities
As a landlord, you are legally bound to provide a safe and comfortable environment. Familiarise yourself with local laws, housing codes, and rental regulations. Ensure utilities are functioning properly. If required, register your property as a rental with local authorities.
Screen Tenant Thoroughly
It is wrong to underestimate the importance of a proper tenant screening process. You may want to have your rent money started flowing as soon as the last one leaves. But a reliable tenant is important to have your home and money safe. A good tenant will pay rent on time. Do proper background checks to assess his financial stability, and reference check with previous landlords and employers. Go through a proper application process, this may take time, but this will avoid future issues that may come.
Draft a Detailed Rental Agreement
A well-written and detailed rental agreement is you first line of defense in case of any dispute. The contract should clarify monthly rent and due date, security deposit and terms and conditions, maintenance responsibilities, rules and regulations of the society and the length of lease and termination clauses. Consider having a legal professional onboard to draft and review the agreement.
Set the Right Rent Price
Decide the rent amount appropriately. If you overprice your place, it may lead to long vacancies, while underpricing will affect your income. Compare similar rentals in your neighborhood and check property condition and size, amenities offered, location benefits like distance from school, markets, hospitals, local transport, and the maintenance costs.
Decide Whether You Need a Property Manager
This is specially in case of people who live far from the property or who don't live in the same city. You may not have time to visit the property frequently to check repairs, tenant issues, and other society related issues. A property manager can do the job for you. Although, you have to pay him some cost from your rent, it can save you stress and time.
Inspect and Prepare the Property
Conduct a through inspection of your home. Address necessary repairs or upgrades if needed. A clean, well-maintained home attracts better tenants. Fix leaks and broken furniture if any, or peeling paint. Do the deep cleaning of carpets, floors, and appliances. Ensure all locks and switches are working properly. Take photos of the place to avoid any escalation later.
Create a Move-In and Move-Out Checklist
This checklist helps document property's condition at the time of handover. Both you and the tenant should sign off on it to prevent future disputes over damage or security deposits.
Be Emotionally Prepared
No one tells you this but apart from legal formalities and other routine checks, being emotionally ready to rent your former apartment is equally important. You need to be ready that the tenants won't treat your place exactly the way you would. Accepting this and approaching he process with a business mindset will help you stay stress-free.
Details here are as per Rent Control Act that protects house owner as well as a tenant.
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