The reasons for renting out a property could be many and you need to do your share of homework before taking the plunge into becoming a successful landlord. This way, you won’t get bogged down by the common problems associated with tenants. They could misuse your property, refuse to vacate or worse, not pay rent on time. So here’s a list of points to keep in mind when renting out your apartment:
- There are a set of rules and regulations that you as a landlord need to be aware of. These pertain to taking responsibility for the safety of the apartment that is being rented out.
- You need to determine how much rent your apartment attracts and be realistic about expectations. The amount expected will be determined by the accessibility of the locality, and the easy availability of necessary facilities and infrastructure.
- Renting out your property is like running a small business. You need to do a careful study on the outgoing costs and incoming rent and ensure that the numbers stack up in the end. Outgoing costs will include periodical repairs of wear-and-tear of the apartment.
- In case you are still paying off your loan on the apartment, you need to inform your loaner bank about the change in status.
- Another fact is that income earned as rent is also taxable. When calculating your outgoing costs, do remember to include the percentage of rent income to be deducted towards tax.
- Then you have to consider what type of tenancy agreement you want. Are you going for an annual agreement to be renewed every year or are you interested in long-term tenancy agreements. You will need to have the contracts drawn up legally to avoid any loopholes that would leave you in the lurch.
- You will need to reach an agreement on maintaining a refundable deposit from your tenant equivalent to atleast around 3 months of rent – in case of default in rent payment.
- Finding the right kind of tenant is crucial to how well your renting business goes. Select the places you advertise accordingly or go with a reputed agent. You will also need to check the background details of the tenant yourself.
- In case you have property insurance, you will need to change it to ensure that the contents of the property is not included. If you’ve furnished the house or store any of your personal belongings there, you may require separate insurance to protect these items.
- Finally, you should be ready for void periods too, when there are no tenants and thus no rental earning. Becoming a landlord is one of the easiest ways of earning a second income, if you follow the rule book to the T!
For those interested in investing, do check out the luxurious Fortius Waterscape apartments located off the Old Madras Road in Bangalore at: http://www.fortiuswaterscape.com/