By Renting out a house is a big decision for a house owner. For a certain period of time, the house will be occupied by another person or family, who will act like a house owner in many matters. So, if you are thinking of renting your house for a long-term or short-term basis, you should follow certain procedures. There are some legal, financial and social implications are attached to your decision, which you can’t avoid. On the other hand, renting a house in Kerala has many benefits, particularly if you are not occupying it at present, and you want to have some extra earning.
Your Fundamental Responsibility As A Landlord
Your responsibility as a landlord increases to some extent when you decide to give your house on rent. When you are renting out a house for the first time in Kerala, you have to decide, whether you will be able to meet those new responsibilities, along with the existing ones for the sake of protecting your valuable property. Some of these responsibilities include the following:
- Periodical repair and maintenance of the house
- Keeping close contact with the tenant
- Keeping an eye on the tenant to monitor their basic housekeeping procedures
- Collecting rent regularly as per the schedule
- Paying house insurance without fail
You are giving the house on rent, which is not a permanent affair. Ultimately, it is your property, and everything related to the house is your responsibility. So, you need to be serious enough in this matter, so that the market value of the house never goes down.
10 Secrets You Need To Know While Renting Out The House
Before renting out the house, you need to know 10 really important secrets on how to put your house for rent to protect it from unexpected issues or damage. If you are renting out the house for the first time, then these secrets are too important guidelines for the ultimate protection of the property. Here has a look: Complete all repairs, maintenance, and painting jobs – Before renting out a house checklist of all necessary repair and maintenance works is to be created. Just list up all the repair and maintenance works to be done, including any changes in electrical wiring, fittings, and switchboards. Inspect the roof and floor, inspect the pipelines, taps, basins, and all fittings in the bathrooms, also inspect the drainage system in the backyard to spot all the problem areas that require immediate repair. Paint the house if it is necessary. The house needs to be in absolutely livable condition, so that the tenant does not get any chance to complain.
1. Complete all repairs, maintenance, and painting jobs – Before renting out a house checklist of all necessary repair and maintenance works is to be created. Just list up all the repair and maintenance works to be done, including any changes in electrical wiring, fittings, and switchboards. Inspect the roof and floor, inspect the pipelines, taps, basins, and all fittings in the bathrooms, also inspect the drainage system in the backyard to spot all the problem areas that require immediate repair. Paint the house if it is necessary. The house needs to be in absolutely livable condition, so that the tenant does not get any chance to complain.
2. Determine how much rent you can charge – This is the most important matter, while deciding to rent out a house. You can’t fix a rent more than the prevailing market trend, nor you should fix anything lower than the prevailing market rates. In fact, if the condition of your house is better than average, the location is attractive, and the community is good, you can charge slightly more than the prevailing rates in the market. Review the local newspapers, online real estate sites, and talk with the neighbors regarding the standard rate rent you can charge. While negotiating with the probable tenants, you may have to lower the rent to some extent. So, keep provision for that negotiation too.
3. Estimate the tax you need to pay – After renting out your house tax implications of the properties will be somewhat different. The rent received is treated as an income by the income tax department and it will be taxed in line with the rules and regulations applicable in this matter. Some allied matters, like a mortgage payment, maintenance expenses, etc. are also taken into consideration, while imposable tax on the rental income. In any case, you need to be informed about this matter, and if necessary, consult with a tax expert.
4. Estimate the value of the furniture and fittings kept in the house – There are two options available: you can remove all the furniture &fittings keeping only the extremely necessary things, or you can keep the house furnished making them usable. In the latter case, valuation of the house increases to some extent, but there may be comparatively fewer takers of such houses.So, decide to keep furniture & fittings, or not to keep them, depending on the market demand. Follow the trend in your area, or what the neighbors have done in this matter. If you are keeping some furniture & fittings, then assess their market value, keep them clean and usable, and provide sufficient information about their condition to the tenant.
5. Look yourself or take help – While looking for a suitable tenant, you have two options at hand: talk with an agent who can help you to look for a suitable tenant, or place advertisement yourself and handle calls of the people looking for rents. You will get plenty of advice on how to rent your house without an agent, but this option is a little bit lengthy and complicated, as you have to select the right tenant by judging his suitability. On the hand, if want to know, how to rent your house fast, the experts will advise to contact an agent. An experienced agent always has lots of contacts, people also come to them in search of a good house available on rent. So, an agent can speed up the process, as also check the identity of the tenant through his strong network. You have to pay him negotiated remuneration which may be range from 50% to 150% of one month’s rent amount.
6. Find a good and responsible tenant – Finding a good and responsible tenant is the most complicated part of this process. It is really hard to cross-check the identity of the applicant if he belongs to some other part of the country. However, there are many ways to find his or her identity:
- Ask the tenant to furnish all necessary information, like name, DOB, permanent address, father’s and mother’s name and address, his or her employment or professional details, etc.
- Ask him or her to bring a photocopy of any identity proof, and resemble it with the original one.
- Ask him or her to furnish the identity proof all the adult members of the family who will live with him in the house.
- Ask the probable tenant to furnish at least 3 references with their respective contact details
You can also do some background check on the internet by checking credit reports, looking for criminal reports, and scrutinizing his or her social media profiles. If necessary, you can also talk with his or her employers, and previous landlords
7. Inform your house insurer and mortgage company – Never hide the information that you are going to rent out the property for the time being to your mortgage company, and insurer. They have all rights to know the current status of the property, and it is also important from your part to be as candid as possible. You may need to change the nature of the insurance policy from the homeowner’s insurance to landlord property insurance to save the property from Any damage caused due to the negligence by the tenant.
8. Make a flawless tenancy agreement – This legal part can’t be neglected. You can’t make it a generic one if you’ve no prior experience on renting out a house. Meet a legal advisor, narrate all your needs and take the help of the legal advisor to prepare a full proof agreement. It should include every important detail, including tenancy period, security deposit details, rent amount details, expenses to be born for any repair and damage, your pet policies, who will pay recurring expenses, and all such details.
9. Protect all your fundamental rights through the agreement – As a property owner, you have some fundamental rights, like you can inspect the property whenever you want without disturbing the occupants, you can use the freehold part of the house or lock them, you can take part in community meetings, etc. keep those fundamental rights clear to the tenant and also prepare the agreement in accordance with the prevailing rules and regulations of the area.
10. Discuss community norms and basics of housekeeping with the tenant – It is important to let the tenant know community norms that everyone in the community is bound to obey. At the same time let him or her know how you are expecting the tenant to behave and maintain the house. Cleaning the garden, rooftop, backyard, etc. are the parts of housekeeping, discuss the matters openly with the new tenant.
If you are renting a house for the first time, you should be a little bit cautious while selecting a suitable tenant, and undertaking an agreement. Make the matter as open as possible, and get knowledge from your friends and colleagues on pros and cons of renting a house. It is always a good decision, if you can take responsibility and pay attention to the matter with utter seriousness. The primary steps are important, once the tenant starts dwelling there, many of your responsibilities will be taken by them. So, follow the secrets discussed above to stay safe and increase your income by renting out the property to a good tenant.
HiLite Builders is a flagship company of HiLite Group headquartered at Calicut.We are proud to say that we played a key role in the growth of Calicut with our contribution in the development of residential and commercial properties. To know more details about our ready to occupy apartments in Calicut, contact us now!
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