Skip to main content

Checklist for Renting out your house

Invest In Tax Saving Mutual Funds Online

Call 0 94 8300 8300 (India)

 

Though renting out your house sounds like a big responsibility, the payoffs are often large. With a little research and preparation, you could rent your property for a fair price and protect your valuable investment, too. Considering the increasing property values, renting out a place and staying on rent could both help save big sums of money. As renting out a place means additional income, many senior citizens consider renting out a room or two in their flats.

There are various ways to go about this. A look at the factors to consider before renting out your house:

Computing the rent

What you get depends on many factors —the amenities provided, the maintenance fee and demand for the property. After considering these, one would arrive at an approximate rent in that area. Additionally, one can bargain for better rent, depending on the weightage of these factors. In other words, you could ask for a higher rent if your society allows the tenant to use amenities such as gyms, swimming pools, etc. Besides, your broker could easily help you find the current rent rates in your area. However, real estate experts say it isn't always necessary to abide by the broker's word; one should be satisfied with the rent he gets.

The rent one expects for a residential flat is only two to three per cent of the property's annual capital value. A terrace, a furnished flat, a modular kitchen, good wooden fixtures, etc, could help you increase the rent for the flat. If the maintenance fee charged by your society is high, owing to various facilities provided, the rent could either rise or fall, depending on whether the society allows tenants to avail of these.

These factors can add value to rent, especially in a down market, when tenants are selective because of the increased availability of rental homes and their expectations are much higher.

Background check of the tenant

It is extremely important to do a background check of the tenant before allowing him/ her to use your flat. This is because the tenant is also responsible for keeping your flat in good condition.

To be safe, it is best to check for minute details of your society and its by- laws. For instance, some housing societies deny tenancy based on a person's eating habits or his/ her marital status. Real estate experts say tenancy can be denied only if the qualifying conditions are stated in a society's bylaws.

One should also check important details such as the tenant's current job, the contact details of family members and the number of people who would occupy the house. Also, keep a photocopy of his identity proof and verify this with his previous landlord.

Preparing documents

After you find a tenant, you have to prepare a ' rent agreement', with the broker's help. The broker would also help carry out tedious errands such as the tenant's police verification and registration of the lease agreement. Police verification and registering the agreement could take up to eight- 10 working days each. One cannot rent out a flat without completing these formalities.

Every city has a preplanned rent agreement. Since documentation takes time, one should keep this ready as soon as he/ she decides to rent out his apartment. Ideally, the tenant is expected to pay only the electricity bill of the house; property tax, maintenance, stamp duty and registration fees are to be borne by the flat owner. The deposit money, the rent payment mode, the type of agreement, the description of property and the tenure of stay are a few things the agreement should contain. The facilities the tenant is liable to pay for should be clearly mentioned in the agreement.

Fearing misuse, most house owners don't rent out their houses.

However, if your rent agreement is intact, you could add relevant clauses in the agreement that would ensure the damages incurred ( if any) are paid for. A similar legal process and a leave and licence agreement would have to be prepared by anyone who wishes to rent out even a single room of his apartment.

Vacating a house

The tenant and the flat owner should give each other a prior notice of three to six months if they want to terminate the contract. If the tenant damages the property in any way, doesn't pay his electricity bills or does anything outside the contract, as an owner of the house, you could deduct the stipulated amount from his deposit. If the tenant refuses to vacate the flat, you could file a police complaint. In case of breach of contract, it might take two to three months to resolve such cases, depending on the seriousness of the complaint.

While renting out a flat is the flat owner's decision, the housing society in which the flat is located may have a say in the matter. Individual societies are legally empowered to deny tenancy, based on their by- laws. However, the conditions concerned aren't stated in the society's by- laws, one can dispute these.

Some societies may charge flat owners extra maintenance fee if the tenant uses the amenities

The leave and licence agreement should contain the following clauses:

Licence fee: Quantum, due date & consequences of delay/ non- payment of rent

Security deposit: Quantum and refund provisions on termination/ expiry of agreement

Taxes, whether inclusive or exclusive of licence fee

Charges: Who would pay for electricity, water, maintenance and parking

Term of the agreement, as well as renewal ( if any) to be clearly defined |Lock- in period ( if any) agreed between the parties

Termination provisions of both parties

Liquidated damages for breach of obligations, including failure to vacate after termination/ expiry of agreement

Alienation rights of the licensor

Happy Investing!!

We can help. Call 0 94 8300 8300 (India)

Leave your comment with mail ID and we will answer them

OR

You can write back to us at PrajnaCapital [at] Gmail [dot] Com

---------------------------------------------

Invest in Tax Saving Mutual Funds ( ELSS Mutual Funds ) to upto Rs 1 lakh and Save tax under Section 80C.

Invest Tax Saving Mutual Funds Online

Tax Saving Mutual Funds Online

These links can be used to Purchase Mutual Funds Online that are regular also (Investment, non-tax saving)

Download Tax Saving Mutual Fund Application Forms from all AMCs

Download Tax Saving Mutual Fund Applications

These Application Forms can be used for buying regular mutual funds also

Some of the best Tax Saving Mutual Funds available ( ELSS Mutual Funds )

  1. ICICI Prudential Tax Plan Invest Online
  2. HDFC TaxSaver Invest Online
  3. DSP BlackRock Tax Saver Fund Invest Online
  4. Reliance Tax Saver (ELSS) Fund Invest Online
  5. Birla Sun Life Tax Relief '96 Invest Online
  6. IDFC Tax Advantage (ELSS) Fund Invest Online
  7. SBI Magnum Tax Gain Scheme 1993 Invest Online
  8. Sundaram Tax Saver Invest Online
  9. Edelweiss ELSS Invest Online

------------------

Best Performing Mutual Funds

    1. Largecap Funds Invest Online
      1. DSP BlackRock Top 100 Fund
      2. ICICI Prudential Focused Blue Chip Fund
      3. Birla Sun Life Front Line Equity Fund
    2. Large and Midcap Funds Invest Online
      1. ICICI Prudential Dynamic Plan
      2. HDFC Top 200 Fund
      3. UTI Dividend Yield Fund
    1. Mid and SmallCap Funds Invest Online
      1. Reliance Equity Opportunities Fund
      2. DSP BlackRock Small & Midcap Fund
      3. Sundaram Select Midcap
      4. IDFC Premier Equity Fund
    1. Small and MicroCap Funds Invest Online
      1. DSP BlackRock MicroCap Fund
    1. Sector Funds Invest Online
      1. Reliance Banking Fund
      2. Reliance Banking Fund
    1. Tax Saver MutualFunds Invest Online
      1. ICICI Prudential Tax Plan
      2. HDFC Taxsaver
      3. DSP BlackRock Tax Saver Fund
      4. Reliance Tax Saver (ELSS) Fund
    2. Gold Mutual Funds Invest Online
      1. Relaince Gold Savings Fund
      2. ICICI Prudential Regular Gold Savings Fund
      3. HDFC Gold Fund

Popular posts from this blog

What are the factors affect the changes in Interest Rate of Fixed Deposits?

  What are the factors affect the changes in rate of Fixed Deposits? Fixed Deposits are now considered to be a very old fashioned method of saving, but still attract many investors since they have guaranteed returns at the end of the tenure of the investment at a decent interest rate. There are various factors that affect the rates of interest for a Fixed Deposit. Policies of the Reserve Bank of India   - The several norms and restrictions posed by the Reserve Bank of India , in order to gain optimum control over credit and inflow and outflow of fund throughout the country. The repo rate changes, cash reserve ration tends to change and these changes affect the banking products like Fixed Deposits, loans etc. Recession   - When unemployment in a country crosses the benchmark set Recession hits, and slowly the country faces an economic slow movement, affecting the purchasing power of the people in the country, forcing the Reserve Bank of India to release more funds in the financial marke...
Read more

Understanding Your Cibil Credit Information Report

   WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions.    While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application.    Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...
Read more

Capital Protection Oriented Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300   Capital Protection Oriented Funds   Erosion of capital is one of the key concerns for investors wanting to invest in equity mutual funds. To address this concern, asset management companies have launched Capital Protection Oriented Funds (CPOFs). What are CPOFs? CPOFs are generally three to five-year, closed-ended funds where 70-80% of the portfolio is invested in fixed income securities, which mature on or before the scheme's tenure. The investment in fixed income securities grows to 100% at the end of the tenure, providing the investor with capital protection. The remaining portion (20-30%) is used to take exposure to equity, which provides the upside. Exposure to equities is either by directly buying equity stocks (plain vanilla CPOFs) or by b...
Read more

About CRISIL IPO Grading

CRISIL IPO (Initial Public Offering) Grading is an opinion on the fundamentals of the graded issue that reflects CRISIL's independence and expertise. This opinion is expressed as a relative assessment in relation to other listed equity securities in India. The assessment is based on a grading exercise carried out by industry specialists from CRISIL Research. A CRISIL IPO Grade 5/5 indicates strong fundamentals and a CRISIL IPO Grade 1/5 indicates poor fundamentals. CRISIL IPO Grading reflects its assessment of the graded company's equity fundamentals as distinct from an assessment of debt fundamentals. A CRISIL IPO Grade should not be construed to mean a comment on the price of the graded security nor is it a recommendation to invest or not to invest in the graded security. However, this grade is not an opinion on whether the issue price is appropriate in relation to the issue fundamentals. The grade is not a recommendation to buy / sell or hold the graded instrument, or a comm...
Read more

Mutual Fund Review: ING Dividend Yield

  ING Dividend Yield's small assets enable the fund manager to churn in impressive returns… Strategy The aim of the fund is to invest in stocks which offer a high dividend yield. This fund deploys a value based strategy which aims to gain from investing in fundamentally strong and free cash flow generating businesses. The scheme focuses not only on growth but also on the cash generated by the business, which mostly leads to stable returns even in volatile markets. This fund has a low volatility because of its investment in high yielding stocks. The scheme tries to include stocks that yield dividend above the dividend yield of the Nifty and stocks with liquidity, which throws up a universe of 150 stocks.   Our View Launched in October 2005, this fund invests at least 65 per cent of its assets in high dividend yield stocks. The fund has consistently maintained a mix of stocks across varying market capitalisation, with a higher tilt to mid caps compared to small caps. Howev...
Read more
Related Posts Plugin for WordPress, Blogger...
Invest in Tax Saving Mutual Funds Download Any Applications
Transact Mutual Funds Online Invest Online
Buy Gold Mutual Funds Invest Now