Tips to Prepare a Home for Rental:

A home for living is perhaps the most sought-after facility a person would look forward to. It could be a matter of first priority for a married individual. A survey has indicated that more than 70% people do not own a house and have to live in rented accommodation. People have to compulsorily live at a place where their profession demands. This crying need to get a rented accommodation becomes a great income opportunity for the real estate owners.

Passive Income

The greatest advantage for the landlord in letting his property on rent is the acquisition of passive income. The landlord gets paid over & over, again & again, regularly, for doing nothing! He need not spend a minute of his precious time. However, getting the benefit of passive income is not an easy and straightforward task. It does require a careful deal and the following tips are extremely crucial in the matter.

1) Vision:

A proper vision of the possible requirement for housing in the area where you own a property is a pre-requisite. Identifying the exact requirement in terms of area and facilities needed can be useful.

2) Planning:

Based on your vision, you can plan for creating the space for accommodation. It must, however, not exceed your budget provision.

3) Construction phase:

The construction must match the need of the end user expectations and consulting a professional architect is a better way to start with. Investing smaller amounts from your savings for the construction activity is usually the wisest step one can take. It can pay you dividends in the longer run.

4) Legal documentation:

Once the construction is ready, it is extremely important to keep ready an agreement format to rent out the space to prospective tenant. The documentation should spell out clear terms with regard to duration of the letting, tax liabilities, rents for electricity, water and other amenities, character and antecedents’ clause, and a clause pertaining to enhancement of rent. The annual enhancement of rent value may vary from 2% to 10% annually depending upon the locational advantages and market conditions.

5) Verification of character and antecedents:

It is essential to ensure that the incumbent is a person of reliable character and will not impose any possible threat of to safety and security of the interests of the landlord. There are instances where the tenants depicting themselves to be innocent guys turn out to be cheaters and resorting to illicit trades.

6) Advance:

It is customary to charge advance rent for a period of about 3 months so that the tenants do not vacate the place suddenly without giving prior notice. In case they vacate without notice, the advance paid by them stands forfeited.

7) Rent Receipts:

Issuing rent receipts can attract municipal tax liability and it could be a costly affair for the landlord. Many owners rent out their apartments as if given to their relatives, just to evade the tax liability. Receiving proper rent receipts can however be beneficial to the occupant to claim house rent allowance, income tax benefit etc.

8) Behavioral aspects:

The occupants exhibit a variety of behavioral problems such as late night arrivals, disturbing friendly get-to-together, sound pollution, destructive activity etc. These aspects are to be taken care of tactfully without spoiling relationships.

9) Negotiation skill:

Profitability of letting out space on rentals largely depends upon the negotiation skills applied by the owner. It is important to consider the expectations of the incumbent but at the same time, the business angle cannot be overlooked.

10) Quality of accommodation:

Though providing a good quality accommodation requires cost, it is a wiser step to invest in quality creation. Experience tells that rentals of better quality space yields better results in terms of profits from rentals. Good quality accommodation brings about the “feel good” effect in the mind of customer which pays dividends in the longer run.