Investing in property is one of the most lucrative means of increasing your net worth today. Especially in one of the fastest-growing real estate markets, buying property is a smart decision as it not only provides appreciation on the investment but also regular rental returns. However, like any asset, property too needs to be managed effectively to maximize the returns it generates. Homeowners should follow a strategy to maximize rental returns on their property.
Important property management tips are discussed below:
1. Setting competitive rental rates
A thorough market research will give an idea of the prevailing rental rates for the property in Kerala. Factors like location, property size, amenities, and facilities need to be considered. By offering competitive rates you can expect your property to be rented faster without having long gaps in between tenants. Although tenants try to negotiate the rental rates it is always best to not allow too much leverage. This may make the tenant doubt the property’s condition or if there are any issues with the property.
2. Screening tenants
A thorough screening process of the tenants becomes necessary to ensure that the tenant does not create problems in the future. Background checks, credit checks, employment references, and supporting documents should be verified for the authenticity of the prospective tenant. Valid identity proofs like Aadhar card, PAN card, police verification, etc should be collected during the tenant registration process. This will ensure that the tenant does not default on the rent, damage the property, or threaten eviction.
3. Lease Agreement
The lease agreement is an important document that spells out the terms and conditions of the contract between the owner and the tenant. The lease agreement should be clear, concise, and easily enforceable without any ambiguity. The agreement should protect the interests of the property owner with provisions for the rent increase, late payment penalties, maintenance of the property, and renewal terms. It is mandatory to register the agreement with the authorities for it to be valid and enforceable. By avoiding potential disputes, the homeowners can ensure that the rental income is protected and there are no unnecessary expenses.
4. Maintenance of the property
A well-maintained property will attract the best tenants and ensure competitive rentals. Regular inspection of the property making sure there are no repairs, damages, or leakages, and performing necessary maintenance will justify the rent and a good relationship with the tenant. A well-cared property leaves a good impression of the owner amongst the tenants and brokers.
By setting competitive rentals, screening tenants, maintenance of the property, and having all the legal documentation and process in place, homeowners can rest assured of the expected returns on their property.
