By Nagaraju.M, Co-Founder and CEO, Rentprop4U
The Indian real estate market has been revived in recent years and the trust has been restored among the investors and the buyers through the implementation of various reformatory policies by the government. The same has induced the NRIs to invest in the real estate with the hope of reaping better returns. The intention of buying the properties in India is to rent them out to prospective tenants, but the hassles involved have them thinking twice before renting out their properties.Although the rental market has a high return potential with recent spike in rental prices,the NRIstill continues to show reluctance to get their property occupied. Even if the property were to be rented out, the NRI would got through a lot of toils to regain ownership of the property from the tenant in order for them to occupy the property. The primary concern of the NRI home owner is to have someone look after the property in case if the fully furnished property cannot be managed from outside the country. They may also face issues such as delay in rent payments, a tenant subletting the property without prior intimation, tenants indulging in illegal activities within the property etc. The following factors will help them to rectify the problems in the process of renting out their properties.
Research on Market Rent:
One of the significant factors that the NRI needs to consider is to understand the market rent for their property. They would have to inquire with neighbours or property management companies who would suggest the right rent amount for the property within that locality. Quite often the tenants would refuse to take up the property if the rent price isway beyond market rates. This can leave the owner with higher vacancy periods to his property and loss of rental income for the entire period that the property remains vacant.
Do a Tenant Screening:
It is always advised to do the back-ground verification and check previous tenancy records before the tenant occupancy; whether the tenant has the potential to pay the rent on a regular basis irrespective of his job. The key element is to check on the tenant’s behavioural records with previous owner, to be aware of any criminal records and the purpose of getting the property and whether it is going to be used for commercial purposes or residency.
If you’re renting your property to a foreigner, you are liable to inform to the local police about his whereabouts.
Get the Rental Agreement
In order to avoid future hassles with the property, it is highly recommended to get a proper rental agreement with all the necessary clauses included in the agreement. The time line of the agreement should be 11 months which would be ideal for any property. Make sure the tenant goes through the entire agreement thoroughly before he /she signs the agreement to ensure that they act in accordance to the terms and conditions laid down in the agreement. It’s necessary to consult with a lawyer before drafting the agreement, as they will be able to guide you with thelaws regarding the Tax Deducted at Source and the necessary rules and regulations to be followed by the tenants. Legally register the agreement by paying the stamp duty since only registered agreement offers protection.
Power of Attorney to Indian resident
It is advisable to handover the power of attorney for your property to an Indian resident whom you can trust and if possible your initial preferences should include your immediate relatives. This will help the particular person with the POA, to sign the rental agreements and renew the agreement if required. The concerned person will also be immediately available to address any issues whenever it is required and can entrusted to safeguard your property.
Corporate Comm India(CCI Newswire)
