The Basics
So, do you want to own a property and then rent it out? Or do you plan to lease it? You’re not alone, as many families look at renting owning properties as an income generating activity while at the same time creating appreciating assets. Hurdles and issues, some trivial and some not so trivial, are a part of most activities that involve services and monetary transactions. While property rentals are surely not free from issues, it is important to note that many landlords have made fortunes from rentals. Here are concepts that will propel you to take the risk and build self-sustaining properties.
Massive Supply Missing in The Residential Rental Market
India has an astound residential rental market of $20 billion but there exists a huge gap between the supply and demand. While the desire to plug into the gap and earn out of it may be strong, it is important to say that preparation is key in entering the market. Coming into the picture as a landlord must be accompanied by knowledge of what’s in it for you.
Selecting the Right Tenants: The Role of Patience
Listing down a property for rent is a process that stirs some emotions, particularly the eagerness to start locating a suitable tenant. Once you make up your mind to lease out your property, your natural urge is likely to be the finding of a suitable occupant. The normal places for searching include the Internet, your own family and friends, or in your area – real estate agents and brokers. Most instances owners of rental properties want to conclude a transaction as fast as possible and look forward to getting a reasonable deposit. This comes with risks, potential security issues and being stuck with a sieged lease property. You should be able to weed out a risky tenant and be patient in your decision. Go to the tenant you’re considering and talk to him or her in order to evaluate their credibility, rather than making a judgement based solely on a broker’s claims. Lay out the particulars and then sign a contract professionally prepared by a lawyer. Avoid overly close friends and relatives if you can since getting them to follow the agreement can be an uphill task.
Understanding the Rent Control Act
A good percentage of custom’s believes that since the Government of India has enacted the Rent Control Act, which is generally regarded as more favorable to tenants, the Act should contain provisions that adequately protect the rights of landlords and are fair and reasonable in nature. First and foremost, any tenant who stays in the premises after the expiration of the contract signed with the landlord is liable for rent increase. Similarly, if there is a need, repairs and remodeling of the property can be done after getting the tenants out. These are some of the many clauses that landlords, regardless of experience, need to be aware of to prevent exploitation by tenants.
A Guide for Landlords Under a GST Regime in India
So ideally cash landlords need to comply with GST which is also crucial. Rental property owners who earn more than 20 lakhs INR per year in rent specifically for commercial use, i.e. residential buildings are covered by goods and services tax. However that can only be 18 percent of the total rental income received. The reverse is true in this instance as it only relates to landlords who rent or lease out their properties to businesses whereas, properties leased for residential purposes stands to be unaffected. If however one is interested in allowing companies and other businesses to rent office space or lease it for an extended period then yes taxation laws have to be adhered to so as not to incur penalties. And remember this figure of 20 lakhs is inclusive of the sale value of all the services as well as goods.
The Benefit of Leasing Out Properties
Earning leasing properties appears to be hassle free when gaining extra income is the focus while at the same time acquiring assets. Once you have found the ideal tenant you actually don’t have to bother about that until the term of the actually ends. Consequently, if the lease is not renewed, this exercise will, or at least should, be done on an average once a period of eleven months. Also, after they have been paid, the compliance and taxation parts will happen automatically as the digitization of transaction and payments will handle this. If done from time to time and correctly, maintenance will rarely disappoint. So for the landlords one can say that this is much better than a lot of investments that are available. One can have their cake and eat it too!
Where Your New Property Will Be Found
Residential properties in the regions of Bangalore seem to be some of the most favorable locations of the provided Dream Location Property. At the moment we have apartments that are situated around East Point near Marathahalli and Lumos next to Yeshwanthpur that are ready for occupancy. Perfect for families who wish to look out for investment options, there are a range of prices that will accommodate a vast majority of people including men on a budget.
Available at Places that are popular among house seekers, owing property in any of these happening places could perhaps be taken as your next wise decision to creating fortunes that will take care of your cash flow requirements.
For more information about Dream Location and to search your dream property, please visit Dream Location on Google Map. Contact us today to know more about the best real estate deals in Delhi and North India; we will connect you to the right property investment.