Renting your house? Here are a few tips you must remember

Buying a home is often an investment. And when the property is purchased elsewhere, buyers mostly give it on rent. While renting your house is wise idea—a second income and the property will remain in a livable condition, here are a few important things to keep before you give away your house on rent.

Decide The Rent

It is important to fix a rental after you have done your bit of research about your property. Deciding the rent depends on key factors such as the area, features, locality and facilities offered.

“It is always essential to ascertain the correct rental amount for your property. In such a competitive market, you cannot ask for more than the prevailing market rate. To ascertain this, you need to do a thorough check of the area’s current rental rates, and price your rent competitively. Only if your property is well-maintained, fully furnished and offers that extra ‘luxe’ factor can you can charge a consummate premium – and even that needs to be logically calibrated,” said Santhosh Kumar, CEO, Operations and international director, JLL India.

Insuring the property

“A savvy landlord gets his rental property fully insured. A landlord is always at risk because he is not the one controlling the property, but the tenant. Landlords should consult with their insurance agent to ensure they have the maximum amount of liability coverage for their property,” said Kumar.

The Rental Agreement

It is important to prepare a rental agreement every time you rent your house. “Every rental agreement should be in writing and registered. The rental agreement should provide the term of the lease, monthly rental amount and security deposit. It should specify also all the terms and conditions such as who will pay for utilities water, electricity and maintenance charges,” said Kumar.

He further added, “The purpose of tenancy should be clearly mentioned, such as whether the property is being used for commercial or residential purpose. If the rental agreement is set to expire and you and the tenant agree to extend the term of the lease for a specific period, then the extension should be in writing.

Registering your rental agreement is extremely important as it can be used as evidence in case of any legal dispute with the tenants.

Police Verification

Kumar calls it an extremely important tip for landlords to remember. “This is one of the most essential parts of the process which helps in background check of the tenant. Not running a background check is a punishable offence under Section 188 of the Indian Penal Code. The landlord has to fill the verification form, obtainable from the state police department website. It must then be submitted to the local police station along with identification proof of the tenant. The local police then conduct the background check and give approval for the rental agreement,” noted Kumar.