How To Earn Safe Returns On Your Property When Renting It OutJune 24, 2018
If you are renting out your property for the first time, the process may appear confusing and tedious. The usual concerns of a first-time owner include how to calculate the rent, tenant’s paying ability, queries on the rental agreement, security deposit, tenant verification, etc.
These concerns can be dealt with following the below suggestions to earn safe returns
Prepare a legal documentation for the rental process to ensure that there are no discrepancies like illegal property infringement, absence of rent receipt, lack of information regarding the tenant’s background, etc. When the terms and conditions of renting is clearly stated in the agreement, future disputes between the owner and the tenant can be avoided effectively.
The amount to be charged as rent is considered to be directly related to the property’s value. The rental amount is considered to be 0.8% to 1.1% of the home’s total value. Also, the location of the property, available amenities, maintenance charges and other additional expenses are also decisive factors in determining the rent amount.
Lease agreement registration
It is recommended to register the lease agreement under the registration act to ensure its legal validity. The transfer of property act states that any lease deeds with a tenure of over a year should be registered. The usual practice is to prepare a lease deed for 11 months with an option to renew when the period lapses to another 11 months under the agreed conditions. These leases also have to be properly stamped.
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