Have you bought a property of your own? Many house owners prefer to rent their new apartment and reside in rental accommodations. We will discuss the pros and cons of the same.
Various home owners who own property which is situated in the suburbs and themselves choose to live on rent. They put their own house on rent as some areas lack connectivity and basic amenities. For some people, living closer to their work place is a must while others prefer to live separate as nuclear families away from their home.
Many people who have capitalised in property, still prefer to live in central locations, as the new locations are poorly inhabited. Hence, they rent out their properties. Whatever is the cause, house owners must understand pros and cons of letting their apartment on rent.
Risks in renting out
If you lease your flat and start residing closer to the work place, it can attract the income tax department, if the occupant resides for more than 12 months. Moreover, owners must protect their property and ensure occupants do not cause any issues in emptying property or damaging any portion of apartments. Owners must ensure that the occupant is not intricate in illegal activities as this could land them in trouble.
Benefits of leasing out the property
The biggest benefit of leasing out the flat is the additional income. The amount left after deduction of tax from the net annual amount is the additional income. This revenue can be saved as pension fund, for the post-retirement expenses. Additionally the hike in property rates also adds to the asset strength. However, in the last two years, property prices have remained steady.
Precautions to be taken while leasing out the property
If you are planning to lease out your house and prefer to reside in a rented flat, first evaluate the amount of rent that you will be paying as compared with the effective rental income that you will be earning and the money that you will be saving on commuting, before coming to any decision.
Furthermore, be cautious of leasing out the property to potential tenants, who have got acquainted from various other sources. Instead, you must look for tenants through trusted sources, such as family and friends. House owners must also run a background check of the prospective occupants through social media channels, police verification. A knowledgeable decision about occupants makes the process very safe and easy.
Once you have zeroed in on an apartment or tenant, make sure that you must sign a rent agreement. While advocates have a pattern for rental agreements, it is desirable to seek at all the clauses and change it as per your requirements and specifications. The clauses affecting the payments to the residents, repair work, RWA (Resident welfare Association) must be clearly mentioned to avoid disputes and confusions.
Hence, there are many pros and cons of renting your apartment while residing yourself on rent for getting basic amenities and a place near to the work place.