What you need to know before renting your house
Till a few years ago,one of the most dreaded things to do for many houseowners was renting out their property.Most houseowners preferred to lock up their property rather tha renting it out to unknown people.This is because of their own bad experience,or what they heard or read about of the bitter experience of others and the rent control laws favouring tenants.Now things are getting better,thanks to the changing rent control laws.
Renting out your unoccupied property is a wise option.By renting it out,you can generate a significant amount of income ,which can help you in a number of ways besides taking care of house maintainence expenditure or repayment of housing loans.Despite the changes in the rent control laws,you have to be careful before renting out your property.
Here are some tips that can come in handy when you rent out your property.Check out the background of the tenant,find out where he/she is working,what is his/her business and whether,the person earns to pay the rental charges regularly.In the case of companies,check their track record and their reputation,what business they do,whether your society bylaws allow renting out for commercial purposes.If you happen to choose the wrong tenant it will cost you a fortune.If renting your place to a foreigner,you need to register with the police commissioner.Generally ,it is better to rent out properties for a short duration.
The 11 month rent agreement is chosen by people to pre-empt the rent control laws,which apply after 12 months.However,companies prefer a longer period of lease.Always go for legal agreement and register it.Prepare a comprehensive agreement without any loophole.A property lawyer must carefully draft the agreement.In the agreement he must include:
–Clauses specifying what are the charges,if not vacated,when the contract ends.
–Clearly mention that subletting is not permissible under any circumstances.
–mention the period of notice to be given,in the cas eof termination of agreement.
There are three types of agreement for renting out
a.Rental
b.Lease
c.Leave and licence
The leave and licence agreement is the best option.Under this type of agreement,property owner’s interest is better protected than the others.Take advance rent and the security deposit.It will be useful in case the tenant fails to pay the dues on time.Make a list of the fittings and fixtures,and keep the signed copy from the tenant carefully.It will help you when you take possession.
WATCH YOUR PROPERTY
Get the tenant’s permanent address.It may be useful at a later date. Better visit the house once in a while to make sure the tenant uses the house properly for the specified purpose. When the tenant vacates,ensure that the house is in proper condition.Find out whether the tenants has cleared dues such as water,electricity and society fees, if any. Return the security deposit only , when you are certain that all the dues have been cleared