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Things that a landlord should know before renting out their property

Indeed, the Indian population has been more inclined towards a cosmopolitan lifestyle and colossal employment opportunities in the last few decades. This insistent rush of the public in metro cities has made an empty space for the rental industry to develop and surge at a phenomenal rate.

Today, you can find profuse potential renters owing to the increasing costs of residential properties that are out of reach. The rental market is flourishing, and there is no motive for you not to take the benefit. Keeping pace with the price rise, the rental segment has experienced increased interest on the part of investors to a considerable extent.

If you own a house or an apartment in any of the tier-II cities in India or metros, there is a good chance that you can earn a decent amount as rent based on the location and property size. Many potential homebuyers who cannot afford to buy a home in the ever-rising property market choose the option of 1 BHK flats on rent in Gurgaon. Many homebuyers are renting out their homes to earn a high income in the present scenario.

Altered situation

India’s rental market has grown in the past few years as there has been increased awareness about laws to protect the owners’ interests. The homeowners were earlier apprehensive about renting out flats because of a few factors –subletting the property without the owner’s knowledge, apprehension of mishandling of property by the tenant, and renter refusing to leave the flat when asked by the owner, etc.

But, as the country entered the age of the realty boom, the chance to earn via rent has been cashed on by investors. Laws have come into power to guard the rights of proprietors and tenants. Authentications were made compulsory for the signing of the rent contract for the home. Both landlords and renters became conscious that a well-prepared rental agreement caters for the interests of both parties. The demand for rental homes was increasingly created by corporates, multinationals, and student communities.

By choosing to rent 1 BHK flats in Bhubaneswar, you can enjoy a lot of benefits:

  • You can earn a healthy income via rentals.
  • The tenant will look after your property together with paying the rent.
  • If you are an NRI, then it will not be possible to look after the property in the country. In that scenario, you can rent out to a trustworthy party, such as some MNC s who can maintain your property while you are away, added to getting high rentals.
  • You should pay tax on the rent that you earn. But, a 30% tax deduction on the rental income is a standard deduction for maintenance, repairs, etc. You get a normal deduction of 30% for repairs, regardless of the actual amount spent during the financial year.

If you have two flats or houses, which one would you give out for rent?

If you have two properties and have no priorities allocated to them, then it is essential to decide correctly which flat to reside in and which one to let go of.

While deciding which one to give out on between two flats, you should compare the monthly rental fee against the maintenance charges. Factors like the age of the apartment, location, neighbourhood, size, common amenities, facilities, proximity, and connectivity to amenities will come into play. Plan to reside in the property where all these factors are better and give the other one on rent.

How to calculate rent?

Rent is typically calculated at 2.5-3% of the property’s capital value. For instance, if 1 BHK flats on rent in Gurgaon values around INR 3 crore, then 3% of the market value would be INR 9,00,000, which will be the annual rent, which means that the monthly rent payable would be approximately INR 75,000 on the property.

Rent depends on the availability of other facilities too. Good proximity, parking space, garden, lift, compound, painted walls, security, interiors, decent fixtures and furniture, good sanitation and ventilation, etc., will push the rent up.

Documents required while entering a rental transaction.

Whether you want to give out on rent 1 BHK flats in Bhubaneswar or Gurgaon, remember that these documents are essential to a rental transaction – rental contract, lease deed, and leave and license contract. Among the three, anyone is executed when a property is rented out. When an apartment is offered for eleven months or less, the contract is administered under the license contract and lease deed.

If the tenure is over eleven months, then registration is essential. When registering, the price of stamp duty, registration, and other legal expenditures are equally divided between the licensee and licensor. Registration of the renter details with the local police is compulsory. Moreover, if the owner resides in a gated society, he should ask for permission from the society before entering a rental agreement.

People with two or several residential properties usually want to give out their property for rent. Apart from tax advantages, giving out a house for rent has numerous other benefits like getting extra income. But offering a house for rent is not a simple task and usually comes with its fair share of challenges and responsibilities.

Thus, while giving residential property on a lease/leave and license basis, the owner needs to consider the above-mentioned things to protect their rights.