Remember Before You Rent Out

Some people buy real estate property as investment. These people eagerly rent the house out when they have bought it because it is better that somebody uses the space rather than leaving it unoccupied.

These days, getting a rental in popular areas is also a worry. For some, rentals are easy once they establish a rapport with the landlord. For others, the relationship is always tumultuous. Either the landlord has too many demands or the tenant is always complaining.

When you make a rental agreement, whether you are a landlord or a tenant, be careful that you read it well. This is more applicable for the tenant as he will be at the receiving end of many of the clauses. There will be clauses explaining sub-let rules, rent increase, period of time of the lease and notice of termination of contract or vacating the property.

More often than not, even if the law allows the landlord to increase the rent after 11 months, the landlord will be wary of doing it. Sometimes, tenants react negatively to rent hikes and the landlords would not want to lose a good tenant or to spoil good relations with the tenant. If a landlord increases the rent, try and cooperate with him. Understand that the home is also a source of income for him and high costs affect him too. Negotiate with the landlord if necessary but try and remain friendly with him. Searching for another place to stay suddenly and the costs of relocating will again make you spend more money than you think.

As a landlord, it is your duty to see that your tenant does not face any problem with the house and the locality. Pay your dues, such as property tax, maintenance and water bills on time so that the tenant is not discomfited at any time. Pay visits to the tenant after announcing to him that you will be coming. Check out your property at regular intervals so that the tenant keeps it well.

As a tenant, you should also keep the landlord informed of any problems he could sort out for you. Keep the home neat and clean and do not cause any damage to the fittings and accessories of the landlord. If damaged, be quick to replace it. Be frank with the tenant and keep him in the loop about his home.

If your property is still under loan, then you should inform the bank if you are renting it out. If you do not, you could be in for a penalty. When informed, they will probably charge you a fee but it avoids misunderstandings and bad blood.

Include the rent income in your tax statement. You do not want to run into trouble with the tax authorities. Whatever certificates you need from government and other agencies should be acquired before you rent the property out. Else, they could trouble your tenant.

Present a clean and well-maintained house to the tenant at the beginning itself. Do not keep pending work because the tenant will then trouble you to get it done.