How To Retain A Tenant?
A second property is often purchased with a sole aim of earning handsome monthly rentals. Since that happens to be the key purpose of these investments, certain basic rules must be followed to achieve the desired results. For instance, you would invest in areas, which are close to business districts or commercial areas. People working in these areas are likely to look for homes close by, and the demand for rental housing would remain evergreen. You would also ensure that the area is well connected with the reaming part of the city. You would also be careful about choosing the right configuration -- the demand for 1BHK and 2BHK properties are higher among renters. Once the purchase is made, you would quickly list your property on online portals and also take the help of the local property dealer to find a suitable tenant, willing to pay you the right price for your property. By following these steps, you are sure to find a tenant soon enough.
Since the task of finding a “suitable” tenant is not easily achieved, you would want your current renter to stay with you for as long as they could, would you not? A great deal of time, money and resources were spent in finding a tenant. Now, what should you do to make sure you do not have to look for a new tenant every year?
The obvious answer is, be a good landlord.
*Get the premises whitewashed annually.
*Do not be pesky and nosy, and leave your tenants be.
*Do not try to breach their privacy.
*Try and address any other issues that your tenant has.
In short, be of help as and when you can.
Now, this is certainly an effective way to retain a tenant, but, that is not all. You may have to make certain monetary compromises, too, to be able to do that.
As a basic rule, monthly rents increase by 10 per cent at the end of lease expiry. Eleven months after living in your premises, the tenant has to increase the rent to be able to renew the rent agreement. This is also the time you wait for. It is only fair that there is an annual hike in your regular income. Fair and lucrative as it does look, this legally accepted norm in the rental market is not without its shortcomings. Even if you are a great landlord who has been there for your tenant in the time of his need and have addressed all their issues as and when the needed arose, this year-after-year increase in the rent is going to reach its peak at some point. Someone who rented a unit for Rs 15,000 five years back may not be willing to pay Rs 20,000 now, even if the hike is fair and justified.
At this juncture, you would either have to put a pause on the rent hike or be willing to find a new tenant who would have no problem in paying you're the money which you think is rightly claimed. In case you choose the later, do not forget to factor in the time and resources you will be investing in finding a new tenant. Also, it may so happen that you are not able to immediately find a suitable tenant. In such a case, you will be suffering monthly monetary, and despite that will be paying taxes for the same.