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Putting your property on rent is not an easy task. Your property can be misused by tenants or there could be a delay in payment of rent. But if you keep in mind a few points, you can easily avoid all the hassle.
Here is a checklist that you should browse through before renting out your property:
Online listing and references
After tweaking the property to optimal ‘rentability’, listing it on multiple real estate portals makes sense, especially for the tech-savvy tenants. References from friends, colleagues or neighbours can also work well to find a reliable tenant.
Basic checks
It is a mistake to take any stranger at face value, more so if it is a prospective tenant. A landlord should definitely ask for salary slips to gauge the tenant’s paying capacity, and also a letter from their HR department stating their tenure with the company. Identity proofs like Aadhar and Pan card are indispensable, as is a personal interview with the tenant.
Freezing rent and deposit
Depending on how quickly you need the tenant to move in, freeze the rent and security deposit (in the number of months). For instance, in NCR a three-month rental security deposit is standard, while in Bangalore a 10-month deposit is the norm. However, excessive rigidity can lead to a cancelled deal, which can result in rental loss and, if applicable, negative online references.
Rent agreement
Section 17 of the Registration Act makes it mandatory to register a rental agreement if the lease period exceeds 11 months. A detailed and duly registered rental agreement is also handy in case of disputes. The agreement must mention the name, address, father’s name (of both parties) and the exact rental amount – including or excluding maintenance fee, the quantum of rental increase and the period of rental revision. It must also state the penalty amount in case of late payments. The premature lease termination process must reflect clearly for both tenant and landlord. The agreement must further list out all available fittings and fixtures and in case of damage, the repair charges.
Besides, a landlord must also obtain a police verification of the tenant. This not only reduces the potential risk of untoward activities but also serves as a background check of the tenant. In fact, failure to obtain police verification is a punishable offence under Section 188 of the Indian Penal Code.
(Inputs by Santhosh Kumar, Vice-Chairman – ANAROCK Property Consultants)