Taking / Giving Property on Rent? Our Advise----- Be Wise

Tenents. Points to be considered:

·         near / around the property, public transport, neighborhood gentry, proximity to essential markets, schools, hospitals, etc.

·         Check the safety aspects, especially for working / single women. You could get the crime rate in the area on internet.

·         Find out the age of the property. If possible, speak to the previous tenants or the neighbours.

·         by him to the property owner. This agreement is ideally drafted before the tenant occupies that place. Necessary Inclusions of the rental agreement or the Lease Deed would be;

·         Include start and end date of the tenancy

·         Monthly Rent amount payable and the date of payment- should generally be 10^th of the month, especially for salaried persons, to avoid cheque bounce.

·         Security deposit amount to

·         Conditions of termination of Agreement.

·         Notice period for vacating the house.

·         Provisions of electricity, water and power facility & their payment procedure.

Property Owner / Landlord. Rented Property generates additional income by way of lease or rent. But if leased to a wrong person, could cause numerous problems. It requires substantial care and a lot of aspects have to be kept in mind while selecting the right paying guests (PG) or purchasers on rent (rent party):

·         Must check financial capability and background of the prospective tenant (Second party). (Too good offers are dangerous. If the going rental is Rs X and you get offer of Rs 2X, reject it)

·         Police verification of the prospective tenant is a must. This process helps in background check of the tenant. Not doing this is a punishable offence under Section 188 of the Indian Penal Code.

·         Take the permanent address proof of the prospective tenant.

·         Take the bank statement of the bank from which the payment cheques are made.

·         Meet the tenants one on one, interact with them and get to know them. Don’t leave it on the broker – his sole interest is Brokerage.

·         Services of Registered Brokers only must be used. If he charges service tax, (currently 14%), he should deposit the challan & give details of it to you.

·         It is imperative for the landowner to ask the appointed broker to provide the agency registration number, valid signature and agency seal/ stamp on every page of the 'Lease and License' accord so that the broker can be held accountable to look after any legal disputes in future.

·         If possible, rent your property to Tenants with families. If renting to Bachelors, obtain “Comfort Letter” from the Employer of the prospective tenant & do a call check with the Company’s HR / Admin.

·         Lease Deed/ Rental Agreement - A rent agreement or a lease deed is a legal document that contains the details of the rights of a tenant to occupy certain property for a fixed period of time in return of the rent paid by him to the property owner. This agreement must be drafted before the tenant occupies the place. Necessary Inclusions of the rental agreement or the Lease Deed would be;

·         If the period of time is 12 months or less, registration is not compulsory. If more than 12 months, you are legally bound to register which costs a miniscule amount (nearly 1% of the total rent value, depending on the local laws), making it a very authentic legal document.

·         Clear mention of Dates; to and from.

·         Notice period required from both sides; owner and tenant.

·         Rental value and the security deposit made by the tenant and any advance payments done.

·         The annual rent is generally 2-3% of the capital value and differs according to the location and amenities provided. 

·         Date of monthly rent payment (usually around 10^th of each month, especially for salaried tenants).

·         Annual increase in Rent Clause.

·         Mode of payment; ECS mandate or Post dated cheques. AVOID CASH TRANSACTIONS.

·         Clear mention of the size of the property and the number of rooms, bathrooms, kitchen, etc.

Wishing you a Happy Letting out/in of your homes. You may make lifelong friends with your Tenants / Landlord. Happy Safe homes are very important.

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Guaranteed Returns Schemes on Real Estate

Guaranteed Return Schemes

Most of us would have come across lucrative advertisements talking of 11-12% Guaranteed returns on your investments in Real Estate - mostly in Commercial Property like Offices / Shops etc. When Banks etc are giving you just 6-8% returns, why is The Builder ready to give so much more. Its simple Finance. There are one or more of the reasons below:

• The Banks lend only up to a limit, which is decided by various factors. They mainly dwell at high probability of recovery of the loan in case of default.
• If the Builder wants more money, he goes to the Non Structured / Grey market, where he pays much more by way of Interest.
• Due to his paymant capability / track record, Financial Institutions are not lending to him.

The most important point to consider is the credibility & reliability of the Proposer. Even in marriage, we commit a lot but many forget them soon enough. His commitments to you are supposedly sacrosanct, but in Indian Context, its debatable.

Hence, please don't be swayed by mouth watering offers. Follow the dictum - " Anything which is too Good, is Bad".

If you really wish to have a better return, go in for Reputed & Good Listed Companies issuing such Debt Instruments. These could be bought on line in demat form. Your money matters.
Safe & Happy Investing is very important.
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Ensure Your Parents Feel at Home in Retirement – A Thanks Giving Gesture

Most people in Jobs often ponder as to what it would be to have a Permanent home. Profession makes us move places, leaving us feeling deprived of the solace one gets in one’s own house, as their final abode. The feeling gets more pronounced in the twilight years. Generally, closer to retirement we try to relocate considering factors like - likely companions, suitable community, medical facilities in the vicinity, peaceful / countryside life, or for a bigger or smaller property at an aspired location.

The way you cannot forget your childhood homes, in the very same way, our retirement homes also give us a memorable treasure. In case your parents are planning to relocate as part of their retirement, you must be the key player in making their decision a happy one. How???

Where?

Just like Bollywood is all about entertainment, a good home (or for that matter any property), is heavily dependent on location, location & location. It is better to add a few extra minutes to your commute for a better home, than be in the middle of commotion.

In fact, location is the key driver of where we settle finally. In our later years, it’s very important to stay close to family and friends who would care for you and enjoy being around. We might want to finally want to make that dream home in the suburbs a reality and get out of the city life we never really cared for.

Lifestyle is paramount; and the neighborhood we are in will shape that lifestyle as much as where we sleep each night. Work with your parents to tease out their interests, hobbies, where their friends are settled and if they have an ideal location they always wanted to live at. Talk to them about how and where do they see their retirement years and start your property search there.

Requirements

Just like any other property hunt, your parents will have specific requirements for their retirement real estate. Help them audit and capture all of these. Do they need a pet friendly property? Ground floor only? Gardens they can tend to? Hobbies they want to pick up? Ask what’s non-negotiable and what’s a nice to have.

Review the myriad of options out there. Community / Cooperative living, retirement villages and communities, homes specially modified for aged needs, or a house with all close ones in an area?  A list of needs and wants will let you zero in to the perfect location.

Help them shortlist

Follow up your research with in-person visits to locales your parents are considering buying into. Interview them together and make sure their location, features, and amenities measure up. Treat it like any other property inspecting process – tick all the boxes around your requirements, get professional assistance where needed, and look under the proverbial rug to make sure there are no unwelcome surprises. Also, (I cannot emphasize enough) do a thorough check on the SAFETY and MEDICAL FACILITIES available!

Encourage a financial health check

Even if your parents are downsizing in retirement, there are costs associated with that move. Help family members get a complete picture of retirement home costs- One time & Recurring. Assess and ensure that they are well manageable, without major compromise to their lifestyle. If they’re financially adrift, use a suitable financial advisor.

Some retirement accommodations offer options for long term care, and you might want to look at insurance for this. Though it may be confronting, being honest about finances will help minimize distress and prevent disaster. Just remember that money can be a sensitive subject, and attitudes differ generationally.

Reverse Mortgage

The concept of reverse mortgage is catching up in India. It is basically a loan given by a Bank to Old people, generally 60 plus, in lieu of the property which is reverse mortgaged. The owners do not repay the loan in their Life-time. The loan amount including interest is recovered by the bank after demise of both the couple. Generally they cater for 20-25 years, but invariably the clause exists that the property can be taken over by the Bank only after the death of both – the husband & wife.

Comfort Them to Accept the Change Happily

We humans are quite averse to accepting change. There would be niggling worries & doubts, right from daily grocery supply to medics & vets. These have to be part of the Initial Research while deciding the property. These have to be coordinated & organized once relocating. Transitioning to retirement can make us worry about losing touch with the people and places that matter most. Choose retirement homes that help your loved ones maintain habits and hobbies they love, and communities that help them thrive, not wither. Identify aspects of their life that can remain constant while some things shift. 

Listen carefully to what your parents want, need and feel about the process and their accommodation options. Then step up and help them do the work, rather than taking over. By empowering your loved ones to research and make their own decisions – you’ll ensure they have ownership over those choices.

Lastly! Do visit them often, because family is happiness.

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