Authored by Pankaj Singh
Most of us invest in a property to get it rented. Doing this ensures a steady income for us every month, or that is what we generally presume. But making the most out of the rental investment is all about making a series of smart decisions.
Let's have a look into what they are:
Look beyond just a rental lease
A long-vacant property does no good to you. It is better off than being a liability inviting expenditure on internal and external issues. Of course, you can rent it, but the renting amount accounts for only 2-3 percent of the asset. Especially in India where the rental rate is very low.
So, to ensure that rentals are recurring and come with a minimum loss, try to onboard a professional property management company. They can give pearls of wisdom on how to market your property highlighting its features in the best possible light, such as locality, property profile, and other aspects. Also, a well-endowed property does not necessarily provide good returns. Here again, expert advice can come handy to know investment to what extent is sufficient to bear fruits.
Pre-empt maintenance issues
Running repairs on the rental property such as wear and tear of painting, electrical works, woodwork, leakage, etc. or damage caused by the tenant can hit your pocket. A professional property manager can help in pre-empting such issues by periodically inspecting the property, apprising the clients on the issues that may emerge. He can use a check-list to avoid unnecessary maintenance post-facto that can bring down the yield of the property.
Know your tenant
Renting away your properties to strangers is a huge risk. Do a background check or hire a professional service to confirm if the tenant is of the right profile. Also try to evaluate their tendency of defaults, ability to make timely payments, or likability to create issues in the rental cycle. A professional setup has the required resources and tie-ups to efficiently handle any untoward incident.
Safeguard the property against heavy losses
Insurance and maintenance contracts can help your property stay covered against the damages that can erupt in the asset life cycle like problems with the HVAC system, modular kitchen, etc. Reputed institutions with proper collaborations and arrangements can give a better offering to increase the life of expensive amenities installed. It ultimately makes a huge difference in keeping your asset in good shape.
Liquidate at the right time
Many times, owners sell off their properties in haste. It mostly occurs when they are facing a financial crunch or having a lack of knowledge which often wipes off significant returns they would have otherwise made through the deal. Although there is no rule book to follow in case of pricing and the precise time to sell, yet, a professional property manager would be able to consider the owner's interest backed by market conditions and data.
There are many other aspects to consider before getting the property rented. The goal should be to make the maximum profit out of it that is achievable by either strong experience, sound professional advice, or a keen interest in this game. Otherwise, the investment returns may never truly return.
Pankaj Singh is Founder and CEO at Multiliving Technologies