Renting Out Your Property? Here Are 10 Essential Tips for First-Time Landlords

Posted on: Apr 15, 2024 | 3 mins | Written by: HDFC ERGO Team

Renting Out Your Property? Here Are 10 Essential Tips for First-Time Landlords

Renting out your property for the first time can be stressful. Being a landlord for the first time is more than just collecting rent. Most of the time, first-time landlords are quite anxious about the right or wrong thing to do. But knowing the right method and following your local laws can help you to have smooth sailing. If you rent your property for the first time, here are a few helpful tips to prepare a profitable rental agreement.

Understand Your Responsibility

As a first-time landlord, you need to know your responsibility. This includes maintenance, collecting rent, doing background checks, following local laws, and ensuring what to do in case of accidents or damage.

Screen Tenants Carefully

Before giving your property, you must check the renter's background thoroughly.

If your property is in a housing society, there may also be rules you and your tenant must follow. Some societies even ask for a police background check to be submitted before allowing tenants to rent the place.

You can do this by asking for various IDs, as well as getting in touch with the tenant's previous landlords.

Create a Clear Lease Agreement

When signing the rental agreement, the lease period should be carefully mentioned.

Make sure to add an eviction period to the agreement and a notice time that must be given to the tenant before evicting the place.

The agreement should have clearly stated clauses for water and electricity bills to avoid any confusion or future misunderstandings. Having written rules regarding the rent and security deposit would be the best. You can also look into having a bookkeeping system that will help you keep track of rent payments and any other spending regarding the property.

Know Your Legal Rights and Obligations

A rent agreement over a one-year-old who is not registered can not be used as evidence in court. Therefore, getting a rent agreement for longer than one year is mandatory.

If your agreement is only 11 months old, you may not need to get registered, but you still need to pay stamp duty charges.

Maintain Your Rental Property

Your rental property is your responsibility. Before giving out the keys, make sure the place is in a habitable condition. Rental property management falls under the landlord's duty, including the guarantee of habitability.

The 'Guarantee of habitability means that a place should be free of mould, insects, rats, rot, etc, and everything should be in working condition. You must take care of the broken doors, windows or other damages.

A good tip here is always to take pictures of your place before and after renting it out.

Market Your Rental Property

The value of your property depends on the area. So it is advisable to check the area and find the rent price range. Some housing societies also have their charges; either the tenant pays for it separately, or that should be part of the rent amount and given to the housing society later.

If you're still unclear, the general rule is that the rent price should be 2-3% of the place's annual capital value.

You can contact locals to advertise your property and refer to the Housing Society department to inform them about your available property. You can enlist your place on different websites and look for tenants online.

Handle Rent Collection Professionally

Sometimes, first-time landlords face trouble here; thus, ground rules should be established. You can fix the rent based on the market price, and the tenant must follow it as per the rental agreement.

If the tenant repeatedly misses out on rent, you can decide whether to issue an eviction notice with a required notice period.

Have a clear vacating period mentioned in your rental agreement, along with payment schedules.

Get Your Property Insured

Protecting your property should be your priority. So before signing the rental agreement, ensure you get good home insurance covering damage and loss.

As a first-time landlord, getting good insurance will protect you against fire damages in case of theft, burglary, etc.

Communicate Openly with Tenants

While doing a background check of your tenant and signing the rental agreement, be thorough about everything. A helpful landlord tip is to get everything in writing.

Issues such as late rent, pets, noise complaints, subletting, etc., should be clearly stated in the agreement, along with repercussions if the terms are violated.

Hire a Good Property Lawyer and Caretaker

Good property investment advice includes hiring a good lawyer. This will help you create a well-drafted rental agreement and add the right clause to protect your property. A good lawyer in advance can also help if the tenant refuses to leave or pay rent.

Hiring a caretaker can help you manage your place, collect rent on time, ensure no laws are broken, and advertise your property to find the right tenants. This is even more helpful if you live in a different place than your rented property or plan to move to a different state or country.

Conclusion

Renting property is a business venture and must be treated as such. As a first-time landlord, you must protect your interest through the correct rental agreement. It would be best to always choose the right tenant for your place. Some basic measures like background checks, hiring a lawyer, and knowing your legal rights will help you ensure your property stays in good shape without worry.

Disclaimer: The above information is for illustrative purposes only. For more details, please refer to the policy wordings and prospectus before concluding the sales.

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