Things to keep in mind before Letting-out your Property

Letting-out your property to the right person in the right way can give you years of peace and tranquility and in the opposite; any mistake in letting out your property to a wrong person or in a wrong way can be annoyingly disturbing for you.

Therefore you should keep the following in mind, to maintain a hassle-free property leasing transaction:

1. Make up your Mind as to; What to rent? Whom to Rent? And what is not a part of rented premises?

First of all, you have to exactly demarcate the area, which you are intending to lease. There may be instances, when you are leasing a part of your dwelling house, in that case you must clearly demarcate the areas as to what constitutes rented area and what not, like if there are more than one entrances, then you should clearly mark which entrance will be used by the tenant, and accordingly other easement rights should also be properly listed, to avoid any issues in the future.

You should be clear in your mind about what kind of tenant do you want. Each type of tenant has specific advantages and disadvantages, like if you are letting out your property to a family then there are more chances that your property will be maintained in a clean state and there will be less late night entries and exits and if you are letting it out to students then there may be late night entries but your property will remain vacant in vacations.

You must be choosy in selecting your tenants but refrain from asking discriminatory questions as it may be a subject matter of litigation and you may be liable for damages in some states.

2. Create an exhaustive schedule of the fittings, fixtures, and furniture, if provided.

If you are providing any fittings, fixtures, and/or furniture with the property, you must prepare an exhaustive list of the same and attach it with the contract, and both the parties should sign on that. Many tenants these days get away after doing substantial damage to the property as there are omissions in the schedule.

3. Draft a Contract, which extensively deals with the Rights, Duties, Obligations and Liabilities of each of the parties.

No issue is big or small and even smaller issues can be a cause of great annoyance at times. You must ensure that each issue is properly dealt with in the contract. Some people forget to mention about the permission of pets, food, inserting nails in walls, timings of entry and exit, suitable guarantee etc. which can be a subject matter for litigation.

It should also be kept in mind to not include illegal provisions in the contract like, confiscation of deposits, waiver of rights to sue the landlord, as these provisions can attract litigation and make you liable for damages in some states.

4. Maintain Schedule of Payments.

You should maintain proper accounts and bills of the payments made by the tenant to always keep track of the outstanding, and forbid the tenant to escape from any genuine liability.

5. Keep the Property insured.

Everyone keeps their property insured against any potential dangers from natural calamities, but you should purchase an appropriate insurance contract to remain indemnified and insured from any legal liability in case of litigation if you are giving your property on rent.

Letting-out the property on rent is a great way to insure financial security and build a monetary corpus for major events in life, just follow the basic rules of prudence while dealing with such transactions and you will surely accomplish your financial goals.