Giving a house on rent is a Herculean task. From finding the right tenant to deciding on the rent, there are a lot of things you need to keep in mind while renting out your property. To make this process easier, we have put together some points to help you rent out your property
Prepare the house
Before looking for a tenant, every landlord has to prepare their house. Make sure you clean the house thoroughly and check all appliances are in a working condition. Address potential problem areas including roof leaks, clogged gutters, leaky faucets or pipes, electrical outlets etc. Make sure the floors, windows, and blinds are all well cleaned.
Once you prepared your house the next step is to ascertain the correct rent amount. It is crucial because in such a competitive market you can’t ask for more than the market rate. Doing so will put off potential tenants. However, if your house is better maintained and furnished than that of others, you can charge a premium. Therefore, the main factors that decide the rent are capital value, amenities provided, location and demand.
PREPARATION OF LEASE AGREEMENT
A rental agreement is a legal document that binds the tenant and the landlord to comply with mutually agreed terms and condition. Utmost care needs to be taken while drafting a rental agreement and it should state all the terms and conditions clearly. Here are some of the points you need to consider while finalizing the agreement:
- Rent and Deposit
- Maintenance, Electricity and Water Charges
- Damages, Repairs and Alterations
- Tenant’s Responsibilities and Tasks
- Owner’s Responsibilities and Tasks
- Lease Termination or Extension
- Miscellaneous clauses, including the notice period and any other specific condition both parties have agreed on.
REGISTER THE LEASE
After preparing the lease agreement, the most important task is to get it registered, as per Section 17 of the Registration Act 1908, it is compulsory to get the agreement registered only if the lease period is more than 11 months. For registration, stamp duty and registration fee have to be paid.
Take a security deposit
A security deposit provides monetary security to the landlord, in case of any damage to the property. The tenant receives the deposit back at the end of the lease, minus any deductions for repairs/restoration. The amount to be collected as security deposit varies from city to city. In Chennai, a recent ruling by the court limits the security deposit to one month’s advance rent.