Rita Sen, a retired school teacher in her late 60s, struggled to maintain her sprawling house at New Alipore. With her husband no more and her sons settled in Bengaluru and Mumbai for work, managing the entire property alone was becoming difficult. She started thinking about renting the ground floor.
The idea of additional income and property maintenance seemed practical, but she was worried about the downsides, too. What if the tenant was unreliable with payments? What if they created a nuisance after showing a friendly attitude initially? Mrs. Sen had heard many stories of landlords facing tenant-related problems.
To make an informed decision, she began researching best practices for renting out a portion of her home. She spoke to friends and ex-colleagues, and gathered as much insight as she could. Slowly, she began to realise that with the right precautions, the process wasn’t as daunting as she had feared.
If you, like Mrs. Sen, are considering renting out a section of your flat or house, here is a detailed guide to ease the task.
Turn Your Property into Passive Income
Before renting your house or flat, analyze the following aspects to avoid problems and have a satisfying experience.
Making Necessary Customisations
Based on the house design and your living needs, making some changes to the property may be necessary. It’s not only about painting the rooms and cleaning the space. You may want to set up an additional door or staircase to the property to ensure both you and the tenant get the desired privacy. Setting up a separate electric meter for the tenant and getting its approval is also required.
Getting the Right Price
The house rent depends to an extent on the facilities and the physical location of the property. Properties in an upscale or fast-developing location will fetch you better rental rates. Factors like proximity to the metro, railway stations, and other amenities also contribute to a higher rent.
Looking up similar properties on top property portals can give you a good understanding of the rental rates in your location. Of course, discussing the subject with your friends and close ones who have rented their properties is always helpful.
Things to Check for a Smooth Experience
Like Mrs. Sen, you may have heard or read about cases of people renting their properties, only to end up with difficult and unruly tenants. Predicting people’s future behaviour patterns is never easy. You can take some precautions to tackle this issue.
Get necessary documents and verifications – This is vital to avoid tenant-related problems. Do not rent your property partially or fully to anyone without getting their identification and documents in place. You should also submit the tenant’s documents to the local police station for added safety.
Screen the tenant’s background – Besides checking the tenant’s documents such as Aadhaar, analyse factors like their job, lifestyle, and family. Feel free to check their social media profiles, as this gives an idea about their liking, lifestyle, etc. Those with a steady job usually do not face problems in clearing rental payments on time. However, the same cannot be said about people without a solid career.
Set clear terms – When renting out your flat or house, be upfront about your expectations to avoid issues later. For example, if you don’t want tenants that have pets or you prefer a quieter environment, you’ll want to specify these limitations at the outset. If a tenant’s lifestyle doesn’t align with what you’re comfortable with, such as frequent parties or high noise levels, it’s best to address this early on. Clear communication ensures a smooth and stress-free rental experience for both parties.
Get the agreement right – Before renting a property, ensure you get the rental agreement appropriately made. The current best practice is to make a leave and license agreement for 11 months. Follow the legal procedures and check them thoroughly before finalizing things. You should be clear about things like the tenant depositing the security deposit in time.
Lastly, don’t rush – Take a slow and cautious approach and keep enough time for background verification. After getting the necessary documents, conduct a proper face-to-face discussion with the tenant. This is necessary to clarify your needs and expectations and learn their views and needs.
Summing it Up
Renting out your spare rooms offers multiple benefits, including additional income, a sense of companionship, and reduced property maintenance hassles. Finding the right tenant should not be difficult with proper planning, clear communication, and intent. It can prove to be a rewarding move for property owners anywhere.
