Things to keep in mind while renting your property

Renting your home is not uncommon. When you have a house which is not unoccupied for any reason, it is best to give it on lease. Unoccupied houses can be a bane. Forced entry by trespassers, pesticide problem and wear and tear if kept unused for long are some reasons good enough to rent it out. However, homeowners should take the time to address and prevent the potential pitfalls of this option, especially when you live outside the country. After, all it's still your house!

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Salma Hussain, a Dubai based entrepreneur says, “I am an NRI and would like to put my recently inherited property in Mumbai on rent. Since I am based out of Dubai, I have no immediate use of the house. I do not want to sell it off as Mumbai realty market appreciates every year. I will use it for investment purposes only. Since I am unaware of the rental market of India, kindly suggest the dos and don’ts.

Involve brokers: Involving a broker or an agent is always considered safe. The agent will be responsible for vetting potential lessees and can also help you in case a tenant refuses to vacate the flat.

Check background: After finalising the tenant, the agent will assist in checking your tenant’s background. Police verification is a must. The police will keep a copy of all the documents submitted by you and the tenant for their reference.  If the tenant has a history of criminal activities, it is bound to surface.

A reference from the previous landlord also helps. Though this practice is not prevalent, it is effective. A reference can tell you how long the tenant stayed in the previous property, how s/he maintained the house and whether the rent was paid on time. This will help you gauge the tenant's reliability, trustworthiness and honesty.

References also give a general an idea on whether you are charging the correct amount monthly. 

Check bank statements: Ensure whether the tenant will be able to pay the rent or not by knowing his monthly income. Also, ask him to provide an official letter which includes date of joining and the type of employment contract.  In case you are renting your property to students, don’t forget to make a note of their parents’ phone numbers in case of emergency.

Go for short renewals:  Rent out your property for a shorter period. The standard rent agreement is made only for eleven months. There are agreements where you can go for a 36 months’ rent agreement. However, experts say that the shorter the period of rent agreement the safer you are. If you do not wish to go ahead with the same tenant, this way you have a scope to re-think. 

Document it! Every rental agreement should be in writing and registered. “The rental agreement should cover the term of the lease, monthly rental amount and security deposit. It should specify all the terms and conditions such as who will pay for utilities water, electricity and maintenance charges. The purpose of tenancy should be clearly mentioned, such as whether the property is being used for commercial or residential purpose. If the rental agreement is set to expire and you and the tenant agree to extend the term of the lease for a specific period, then the extension should be in writing,” says Santhosh Kumar, CEO – Operations & International Director, JLL India.

Source - TOI 

Your guide to buying a property

Have you evaluated your requirements? It is very important for a buyer to have a clear head in terms of his/her requirement. Ashwini Bhardwaj, a local real estate agent in Delhi says, “Many a times buyers look for king size apartment and in some cases the requirements are that of big garden, modular kitchen, calm locality, affordable budget and the list goes on. It is extremely significant to ascertain their needs and then start looking for home.” You must be clear about the size, type and the kind of apartment you are looking forward to before investing.

New or resale: Another significant factor is to decide and know whether investing in new or re-sale property will be beneficial for you. Take time to analyze the worth of both new and re-sale property based on your needs and lifestyle. Resale properties are priced less in comparison to new properties. Sometimes they are same priced until and unless it is a under construction property with upcoming social infrastructure.

Amenities: Buyers should consider the liveability factor of a particular locality prior to making investment. It’s not only the nearby schools, hospitals, malls and grocery stores that helps in making decision. Rather, the amenities and facilities available within the residential housing project matters a lot. For children and senior citizens amenities such as medical centre, children play area, swimming pool, club house, among others should be within the residential complex so that they don’t have to venture out to play and socialise respectively.     

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Location! Location! Location! = Right location: Selecting a right location is one of the most complicated aspects of property buying. Every buyer has their own set of preferences like distance to work space, school, malls, bus stops, metro station, etc. It is extremely essential that the area is well-connected to the other parts of city. As a buyer, you need to identify the right location that match well with your needs.

Infrastructure: The place where you are looking forward to invest should be equipped or must be in close proximity to established schools, health care facilities, parks, public transport, grocery stores and others. Whether, an end-user or investor, surrounding infrastructure matters a lot as it decides liveability factor of the locality.

Developer’s credentials: Prior to making investment, it is extremely important for you to do a proper check of the property market and the reputation of the developer. The check must include market presence of the developer, status on the past completed projects, credibility on project delivery and reviews of the past buyers. It will help you in getting an idea about the capability of the developer and also his construction capability/quality.

Explore options: Do not stick with one option rather go explore various types of housing options under different brand names. This will help you get a better understanding of the market to make the best property decision.

Check for project approvals: Before putting your hard earned money in a residential housing project, it is important that you check and enquire about the builder’s credibility. Also check for the project approvals. Being a buyer you have all the right to demand for documents associated with approvals procured from the local authorities. 

Know the hidden costs: Hidden costs are one such expenditure that may take many home buyers by surprise. These hidden costs often escalate the total cost and make it very difficult for the person to handle the expenses. It may include interior cost, maintenance deposit, parking space cost, registration cost, among others. So, it is smarter to be aware of these costs and be ready for this additional expenditure. 

Legal issues: Property transaction comes along with legalities which is sometimes very difficult to understand. Legal experts are the one that help you with the legal issue titles such as No-objection certificate, transferable title, record of right and title, stamp duty charges, tax and many more. You can check the legal advice section of Magicbricks.com to make right decision.

Source - TOI 

Things to keep in mind while renting your property

Renting your home is not uncommon. When you have a house which is not unoccupied for any reason, it is best to give it on lease. Unoccupied houses can be a bane. Forced entry by trespassers, pesticide problem and wear and tear if kept unused for long are some reasons good enough to rent it out. 

www.sevagiri.com

However, homeowners should take the time to address and prevent the potential pitfalls of this option, especially when you live outside the country. After, all it's still your house!

Salma Hussain, a Dubai based entrepreneur says, “I am an NRI and would like to put my recently inherited property in Mumbai on rent. Since I am based out of Dubai, I have no immediate use of the house. I do not want to sell it off as Mumbai realty market appreciates every year. I will use it for investment purposes only. Since I am unaware of the rental market of India, kindly suggest the dos and don’ts.

Involve brokers: Involving a broker or an agent is always considered safe. The agent will be responsible for vetting potential lessees and can also help you in case a tenant refuses to vacate the flat.

Check background: After finalising the tenant, the agent will assist in checking your tenant’s background. Police verification is a must. The police will keep a copy of all the documents submitted by you and the tenant for their reference.  If the tenant has a history of criminal activities, it is bound to surface.

A reference from the previous landlord also helps. Though this practice is not prevalent, it is effective. A reference can tell you how long the tenant stayed in the previous property, how s/he maintained the house and whether the rent was paid on time. This will help you gauge the tenant's reliability, trustworthiness and honesty.

References also give a general an idea on whether you are charging the correct amount monthly. 

Check bank statements: Ensure whether the tenant will be able to pay the rent or not by knowing his monthly income. Also, ask him to provide an official letter which includes date of joining and the type of employment contract.  In case you are renting your property to students, don’t forget to make a note of their parents’ phone numbers in case of emergency.

Go for short renewals:  Rent out your property for a shorter period. The standard rent agreement is made only for eleven months. There are agreements where you can go for a 36 months’ rent agreement. However, experts say that the shorter the period of rent agreement the safer you are. If you do not wish to go ahead with the same tenant, this way you have a scope to re-think. 

Document it! Every rental agreement should be in writing and registered. “The rental agreement should cover the term of the lease, monthly rental amount and security deposit. It should specify all the terms and conditions such as who will pay for utilities water, electricity and maintenance charges. The purpose of tenancy should be clearly mentioned, such as whether the property is being used for commercial or residential purpose. If the rental agreement is set to expire and you and the tenant agree to extend the term of the lease for a specific period, then the extension should be in writing,” says Santhosh Kumar, CEO – Operations & International Director, JLL India.

Source - TOI 

Tips for buying home in the festive season

The festive season, as we can all guess, will bring with it big offers from the real estate industry. Glance upwards at any major traffic signal and one will see hoardings with unbelievable offers on homes. Buy one bedroom and get another free. Receive 12 percent per annum interest on any booking amount one pays. Book now and pay nothing until possession. Discounts on registration fees and stamp duty, free cars, parking, modular kitchens, club memberships, gold coins and cash discounts. If somebody is looking to buy a home, the upcoming festive season might bring the dream home within one's reach. 

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One must remember to double and triple check the offer before signing anything.

Here is a list of things to keep in mind.

Builder's track record: All offers will seem attractive but not all of them are worthy of one's time. It is important to understand that in this market, separating the developers by reputation and track record has never been more important. One needs to look for a builder with a track record of delivery and quality, a company that has not only managed to meet its deadlines on possession but also delivered what had been promised at launch. Do a quick search online on customer forums, news reports and look for problems that the builder might have had with previous projects. Visit previous projects and speak to residents about their experience with the builder. A reputed builder will also be a member of an industry association like Confederation of Real Estate Developers Association of India (CREDAI).

Strong location: Make sure the project is in a strong location with potential for price appreciation. Growth in prices depends on factors like job creation. Is there an IT park or an SEZ nearby? Does the location have good infrastructure in roads, fly over’s, Metro or train stations planned in the future? Is there easy access to schools, colleges, hospitals and malls and parks? A neighbourhood that can check all these boxes will offer the fastest growth in prices.

Price Point: Making a decision on fair price might seem difficult in this market. Start by finding out the prices of similar projects by similar developers in the area. Speak to several local brokers to find out the rack rates and the possible room for negotiation. Speak to a customer who has just bought a home in that project and find out the ground reality of discounts the builder is willing to offer. Find out the monetary value of the offer or the freebie; work it into your price as a discount. When negotiating with the builder one should push for cash discounts over freebies. If one has a pre-approved home loan and the ability to close a deal at the table it will boost the ability to drive a bargain on discounts.

Use the festive season to find the perfect deal for the dream home. Remember, cherry picking in this market will ensure a great value that might not always be available.

Source  TOI 

Interested in upcoming localities to invest? Beware

When buying into fast developing corridors of Bangalore, consider issues like a developer refusing to provide occupancy certificate or localities ridden with civic problems. Research well before investing.

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In the year 2013, when Centre for Policy Research, New Delhi came up with its study, 'How to govern India's megacities: Towards needed transformation,’ Bengaluru was named as the city that boasted a lion’s share of educated migrant population. Most of these were IT/ITeS professionals. With a never ending list of business investment , a large number of people are settling for this cosmopolitan city.

“Perhaps Bengaluru is the only city in South India where you would find a number of North Indian settlers. People are comfortable with settling here because of the number of job opportunities, education and because the city is cosmopolitan, there is a good mix of people from all communities making it more global than local/regional in nature,” says Nishant Jaikumar, a broker with Jaikumar Sons Realty.

Among young who are starting off early, East Bengaluru seems to be a popular pick. Electronic City, Sarjapur and Whitefield are developing fast. However, in a market where transactions are fast paced, what should you take note of?

Completion Certificate and Occupancy Certificate:

Consider this: “A building of stilt plus four floors and a multi-storey building of more than seven floors in Sarjapur - do both need occupancy certificate before the flat owners take possession? If the builder insists that we take over immediately, without occupancy certificate and without registration, is this okay?,” asks Arjun Baidyanathan.

“Investing/buying in a property or floor which does not have an approval/occupancy certificate does not make sense at all as it will be faced with legal issues,” says Atulay Nehra, founder, Atulay Nehra Consulting.

As per experts from S Jalan and Company, the completion certificate and occupancy certificate from the planning authority are essential for any construction as per the provision of law. Commencement certificate is a document that is issued by the local authority to the builder. The builder needs to submit an application and this document is provided to the builder, provided the builder follows all stipulated rules and regulations that are stated by the local authorities. Commencement certificate becomes important when buyers buy apartments that are in the pre-launch phase or under construction. Hence, if the builder asks you to take over immediately without these documents, buyers like Baidyanathan should know that it is not okay.

As per a recent report, nearly 10,000 buildings which include over 50 per cent apartments built after the Karnataka government introduced the Transfer of Development Rights (TDR) in the city in 2005, do not have occupancy certificates.

Whitefield, Bangalore

In some cases, you may hear of building plans being approved but occupancy certificates denied. This is because it may have taken into account other issues such as violations, failure to stick to rules necessary for environmental clearances etc.

As per the Karnataka Apartment Ownership Act of 1972, occupancy certificate is mandatory. Unless the developer gets the occupancy certificate from the BDA or BBMP, the building may be considered unauthorised or illegally occupied, attracting heavy penalties even from residents.

“Many cases have been reported where small time builders have given possession to home buyers and refused to provide them with occupancy certificates. Water connections to such housing complexes became a concern but those who have invested all their savings in one flat do not have the option of fighting developers. They make do with water tankers at an extra cost,” says Jaikar.

Civic issues

The skyline of the upcoming localities have changed over time. Reputed developers have realised that the city is branching east to cater to the mid and high income group and hence housing stock in this part of Bengaluru now consists of properties in the range of Rs 60 lakh to Rs 3 crore.

With the ongoing construction, traffic has become a major problem. With the state budget announcing funds for road repairs in areas such as Sarjapura, perhaps respite is close by. “With over 10,000 commuters per day along this road, the area is under civic stress. Introducing the concept of skywalks and other infrastructural development could go a long way,” says Manas Nag, a migrant settler in the city.

Other issues such as water supply is something buyers should research before moving in. Shiva Kumar, a resident of Sarjapura Road says that his apartment building needs close to 140 tankers per day and the suppliers charge Rs 500 for a single tanker. This means Rs 21 lakh per month spent only on water.

Brajesh Kant, an engineer by profession in Sarjapur, says, “The problem is so severe that we are totally at the mercy of water suppliers, most of who have demarcated their areas of distribution and rival fleet operators make sure that in their absence other operators are not allowed to function. Peak summers are the worst time because that is when one can’t do without a tanker.”

If you are a buyer in some of the fast developing corridors of this IT city, research well before parking your money.

Source - Magicbricks News