Real estate purchase is becoming a challenging dream for many investors in India as prices have sky rocketed. Gone are the days when the EMI of your home loan was paid by your tenant. Now a days, your monthly rent is not even half of your EMI. In such trying times, renting an apartment is the last resort for many. Here are some valuable tips on renting an apartment that you need to keep in mind.
1. Renting the apartment via process of elimination
So you need to move to a new apartment. What are you looking for and why are you moving ? Ask yourself that question first and list down the reasons in order of priority.
Your reasons could be :
- moving closer to your workplace
- moving closer to your children’s school
- the rentals are cheaper in the new locality
Whatever be the reason, you need to make sure which is the most important to you. Renting an apartment that gives everything you desire is not feasible. You need to prioritize and select a locality that satisfies the most important reason for you to move. Cross out the needs that are not being met by your new apartment and think whether they are acceptable to you.
2. Brokers and direct landlords
The Internet offers you the best medium to get in touch with landlords directly. Quite a handful of them advertise their apartments for rent on internet websites like 99acres.com or magicbricks.com
It is not wise to pay a broker two months of brokerage fees while renting an apartment in the locality when you have landlords who want to trade directly. This works best for both sides. The tenant saves a cool pile of money and the landlord gets a tenant quicker.
Decide which route you want to go with. Your urgency on renting an apartment will possibly be the only reason for going through a broker. Of course, it must be noted that in India, brokers control most of the apartment units in a locality.
3. How much apartment rent to pay
Most of the landlords will quote a rent which is higher than they expect because they are aware that the tenant will negotiate. However, you need to do a local research of what the others are paying in the same locality.
You could take a walk to the local kirana stores and ask for rentals or knock on a few doors in the society to talk to people who are staying on rent. These possibly are the best methods to find out how much rent you should pay when renting the apartment.
Other methods could be to check your local dailies for advertisements and call up a few brokers who will readily help you with all the information.
4. See in person before renting the apartment
There have been occasions when a landlord has requested prospective tenants to check a similar apartment in the same locality and then decide whether they wanted to rent his apartment. Now that is a strict no no. You need to check in person the particular house you want to rent out. If the landlord is not willing to show the apartment, smell a rat and move on.
Talking a walk of the locality or society is probably one of the most important tips while renting an apartment. If you don’t see the layout of the buildings and amenities or how small or large the rooms in the apartment are, then you could probably be surprised when you actually move in.
5. Leave and License Agreement
Legal paperwork is a must when you want to rent an apartment. Go through this agreement meticulously. Many landlords or brokers push in clauses which are heavily tilted towards them. You need to challenge those back to get them corrected.
For example, landlords will want a clause documenting an increase in rental values after a year of stay. You cannot get into such clauses because rentals could actually nose dive a year later.
In cases of disputes arising, the leave and license agreement is the only paper you can fight a legal battle with. Make sure it contains what you want. If you do not know what the legal terminologies mean, then hire a real estate lawyer to help you with it.
Good one. I agree that we need to avoid brokers. They are frming a nexus and os it is better going to landlords directly.
I recent moved in a house and avoided brokers.
@Rahul, You do save a pile of money, don;t you ? Brokers are useful when you need a house on rent pretty quick.
@Radhey,
Another very important point is to make the agreement registered. You may have to pay few thousand rupees but its worth it. The court does not recognize the agreement in the normal 20/100 rupee stamp paper.
@Rakesh, Yes you are right.
Usually tenants and landlords share this 50% 50% but it is worth the trouble.
More than the tenant, it is important for the landlord I guess.
@Radhey,
It is shared 50-50 between mutual agreement. But the rule in Karnataka mentions that the tenant has to pay registration fees. So its more favoured to the landlord.
It’s so wiered how the law works, it should be common for the entire country but each state defines its own rules and regulations.
@Radhey,
The agreement is more titled toward the landlords side. It is mentioned that they can claim painting charges but there is no limit to that. My landlord deducted Rs. 11,000 towards painting charges for 1BHK. Is there anything that i can do?
@Rakesh, Yes this is a common practice to charge for painting charges. Even I paid the painting charge but I ensured before moving in that I get a fresh painted house and the amount to be paid for painting while vacating the house was also negotiated and mentioned in the rental agreement.
You have to be smart and create the rental agreement as per your needs and not as per landlords.
@Rakesh, Not really, there is no rule or law that I am aware of towards that.
@Radhey,
There is no rule but at least the amount should be justifiable.
I spoke to my colleagues who had rented apartments and also suffered.
I did approach a family lawyer and he said it is not worth it.
@Vivek,
Thanks for the advise, I am ok with painting charges but at least it should be reasonable. This was my first rental agreement. I shall be smart henceforth. How can we create rental agreement as per our needs, it is we who are in need, the landlords will get many tenants but it is difficult for us to get the kind of house which we desire/like.
@Rakesh, You can create rental agreement based on your needs. I look at it in a different way, it is landlord who is need of money not me. If one landlord doesn’t suit me, I will find another one.
@Vivek,
Seldom you will find an agreement which suits the tenant. Even my colleagues went through the same phase. Anyways in future i will make sure that the agreement suits me too. At least the painting figure would now be mentioned in the agreement. Thanks for that advise.
@Rakesh, You are welcome Rakesh, glad I could help.
You find seldom agreements that suit tenants because tenants don’t bother to read or negotiate the agreement. Landlords put whatever they want and tenants simply sign it.