The real estate industry promises a remarkable journey to generate revenue. You can buy a plot to sell later at a better price; likewise, buy a house and generate revenue from house flipping. Likewise, renting out the property is a trendy way to create passive income from real estate. Read out blog Steps to Become a Successful Real Estate Agent.
If you own any vacant house or room, putting it on rent is like a win-win situation. It means you can maintain the ownership while earning from your property. However, remember that renting a house is not a piece of cake; if you have never done it before, you must have a few questions. Explore the Best Cities to Invest in Real Estate Pakistan.
Moreover, renting process includes things such as legal agreement, determination of rent, finding the right tenants, etc.
Steps on How to Rent Out Your House:
Realtorspk.com is here with a comprehensive guide on how to rent out your house. The guide will cover all of your queries, such as things to consider to find tenants, how to determine the rent rate and the process of legal agreement. Also read a Guide to Selling and Transferring Property in Pakistan.
The steps will be helpful to you whether you are renting out the house/apartment for the first time or have done it before. Hence, you can rent out the property hassle-free with content. Let’s have a look:
- Make Your House Tenant Ready
- Execute Market Research
- List Property or Hire Competent Real Estate Agent
- Choose the ideal tenant
- Join the tenant for property Inspection
- Property Rental Agreement
1. Make your House Tenant Ready:
The first step to renting out your house is, getting the place ready for tenants. Depending on the condition of your home, the property’s age, and how well you have maintained the house, you might need to spend some money on the house to make it tenant ready.
There is no need for weeks or months-long repairs and renovation – a fresh coat of paint can do miracles. Before renting out a house you should know What does Property inspection cover. Among the changes that can make your house ready for tenants include;
- Fresh Paint
- Fixing Leaks in water and sewerage pipes to avoid damage from water
- Treat mold and termite infestation
- Beautify the outer area of the house; for instance, add aesthetic appeal by beautifying the lawn.
- In case your house has a garage or parking area, get it cleaned
In short, your home should look as presentable and beautiful as possible. If you want to earn some extra, rent it out with furniture. Furnished homes and apartments are rented out in higher places than non-furnished ones.
2. Execute Market Research
Conduct market research before fixing the rent price of your house. Online research has become popular these days. You can visit online research to rent out your property. Due to reliable real estate portals like Realtorspk.com, many property owners are turning to the Internet for sound market research.
Whether you conduct online research or go physically, it will give you an idea of what rent you should set for the home. Hence, you can fix the rental price according to the current market rates.
The demand for rent in your surroundings can give you an idea about how much you should charge tenants. Make sure you stay realistic about the rent depending on the property condition, the available facilities and amenities, and its location.
3. List Property or Hire Competent Real Estate Agent:
It is easier to find the right tenant for the property by marketing it in the market. However, you can advertise the real estate to draw the attention of potential tenants. There are two ways to find a tenant for your property fast. Let’s have a look:
- Hire a reliable real estate agent or company or list it on an online real estate portal such as Realtorspk.com. If you are choosing to hire a real estate agent to rent out the house, choose the one with utmost care based on their reputation, offered services, and the amount they charge after finalizing the deal.
- The second way to advertise a property is through a reputable online real estate portal. Online real estate portals like Realtorspk.com give more exposure and reach to potential tenants. It would be best to mention a few things in the listing, for instance, covered area, number of bathrooms and bedrooms, specs like furnished or non-furnished, etc.
Include HD photographs of the property in the listing. Moreover, add things like nearby schools, parks, public transport access, security system, etc.
4. Choose the Ideal Tenant:
It is important to screen potential tenants before signing the rental contract. It is one of the biggest concerns for homeowners, especially in Pakistan. Make sure you inquire about the lifestyle of the prospective tenant. Ask questions like what they do for earnings, members of the family who will live in the house, and their reason for leaving the current home.
Furthermore, ask the guarantor about the relationship with the tenant. You can also conduct a brief background research. These steps are necessary to avoid future issues and ensure the person will pay the rent regularly.
5. Join the Tenant for Property Inspection:
While tenants conduct a property inspection to ensure they will live in a safe and compatible house, it is an excellent opportunity for landlords to learn. Landlords can know what they should do to improvise the house. Moreover, they can answer the queries of house inspectors and prospective tenants immediately during home inspections.
6. Property Rental Agreement:
Once both parties agree on renting the place, it’s time to hire a legal advisor to finalize the rental agreement. The agreement is necessary to protect your rights as a homeowner/ landlord.
Additionally, in the Pakistan Real Estate Landlord and Tenant Law, both parties (landlords and tenant) can negotiate monthly rents. Both parties can agree to finalize the agreement for as long as they want.
One thing that must be done is registering the agreement under Section 17 of the Registration Act of 1908. Registration under the aforementioned act is necessary if the period exceeds 12 years. A tenancy Agreement includes things like;
- Names & Contact Details of tenants and landlord.
- Agreed Period of Tenancy
- Rental Property Description
- The amount of monthly rent
- Due Date of Rent
- Payment Mode
- Bank Account Details
- Rate of Annual Rate increases
- Advance Paid amount details
That’s all for now! We hope this step-to-step guide will make the renting out process a house easy and convenient. Renting out a home is a great way to generate revenue from real estate. Make sure to follow these steps to avoid any issues in the future.