• Renting out your property for the first time can be overwhelming. Being a landlord for the first time involves more than just receiving rent. Often, first-time landlords feel quite nervous about the right or wrong actions to take. However, understanding the correct approach and adhering to your local regulations can lead to a seamless experience. If you are renting your property for the first time, here are several helpful suggestions to prepare a profitable rental agreement.

Understand Your Responsibility

As a novice landlord, it’s important to recognize your responsibilities. This encompasses maintenance, rent collection, conducting background checks, complying with local regulations, and knowing how to respond in the event of accidents or damages.

Screen Tenants Carefully

Before leasing your property, you should thoroughly investigate the renter’s background. If your property is part of a housing society, there may also be rules that both you and your tenant must adhere to. Some societies even require a police background check to be submitted prior to permitting tenants to occupy the unit. You can accomplish this by requesting various identification forms, along with contacting the previous landlords of the tenant.

Create a Clear Lease Agreement

When executing the rental agreement, the duration of the lease should be specified with care. Ensure that an eviction period is included in the agreement, along with a notice period that must be provided to the tenant before they are evicted. The agreement must contain clearly defined terms concerning water and electricity bills to prevent any confusion or future disputes. Having written regulations regarding rent and security deposits is advisable. You may also consider implementing a bookkeeping system that will assist you in tracking rent payments and any other expenses related to the property.

Know Your Legal Rights and Obligations

A rental agreement for a term longer than one year that hasn’t been registered cannot serve as evidence in court. Thus, it is essential to secure a rental agreement for a duration exceeding one year. If your agreement lasts only 11 months, registration may not be necessary; however, you will still be required to pay stamp duty fees.

Maintain Your Rental Property

Your rental property is under your management. Before handing over the keys, ensure that the property is in a livable state. The duty of rental property management falls on the landlord, which includes ensuring habitability. The “Guarantee of habitability” signifies that a property should be free of mold, pests, vermin, decay, etc. , and that all features should function properly. You are responsible for addressing any broken doors, windows, or other damages. A helpful tip is to always take photographs of your property before and after leasing it.

Market Your Rental Property

The worth of your property is influenced by its location. Therefore, it is advisable to investigate the area and determine the rental price range. Certain housing societies may also impose their fees, which may either be paid separately by the tenant or included in the rent amount and later submitted to the housing society.
If you’re still uncertain, the general guideline is that the rental price should be 2-3% of the property’s annual capital value. You can reach out to local residents to promote your property and consult with the Housing Society department to inform them about your available property. You can list your property on various websites and search for tenants online.

Handle Rent Collection Professionally

At times, new landlords encounter difficulties here; hence, foundational rules should be set. You can determine the rent according to the market rate, and the tenant must adhere to it as stipulated in the rental agreement. If the tenant consistently fails to pay rent, you can choose whether to issue an eviction notice with the necessary notice period. Ensure a clear vacating timeframe is outlined in your rental agreement, along with payment timelines.

Get Your Property Insured

Safeguarding your property should be your main concern. Therefore, prior to signing the rental agreement, make sure to obtain comprehensive home insurance that covers damage and loss. As a first-time landlord, acquiring reliable insurance will shield you against fire damage in instances of theft, burglary, etc.

Communicate Openly with Tenants

While performing a background check on your tenant and finalizing the rental agreement, be meticulous about all details. A useful suggestion for landlords is to have everything documented in writing. Matters such as late payments, pets, noise complaints, and subletting must be explicitly included in the agreement, along with consequences for violations of the terms.

Hire a Good Property Lawyer and Caretaker

Valuable property investment guidance entails enlisting a competent lawyer. This will assist you in crafting a well-structured rental agreement and add appropriate clauses to safeguard your property. A proficient lawyer in advance can also support you if the tenant refuses to vacate or pay rent. Employing a caretaker can facilitate the management of your property, timely rent collection, ensure compliance with laws, and advertise your property to find suitable tenants. This is particularly beneficial if you reside in a different location than your rented property or intend to relocate to another state or country.

Conclusion

Renting property is a business endeavor and should be approached as such. As a new landlord, it’s essential to safeguard your interests through the correct rental agreement. You should always select the appropriate tenant for your property. Simple steps such as conducting background checks, hiring a lawyer, and understanding your legal rights will assist you in keeping your property in good condition without issues.

Disclaimer: The above information is for example purposes only. For further information, please refer to the policy wordings and prospectus before finalizing the sales.