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Demand from students and the growing working-class population, have created a positive scenario for the rental market in the Delhi-National Capital Region (NCR). Being an education hub, Delhi witnesses significant demand for rental and paying guest (PG) homes from students. Moreover, with several corporates setting up their offices in Gurgaon and Noida, the need for residential housing for the professionals working in these companies, has increased. Many new locations have also come up in the NCR, which has benefited landlords as well as tenants.
Deciding on the type of tenant to lease out your property
Properties in the NCR that are well-connected with offices, marketplace, hospitals, metro and other modes of transport and have schools in the vicinity, command higher rental yields, points out Dr Prodipta Sen, expert – retail and real estate, MRICS (UK).
“Newer houses and renovated ones, command higher rents, compared to older ones. One could also list the property with local brokers and real estate portals, to understand the rate that the area or locality commands. One also needs to decide on the type of tenant – whether to go opt for corporates, individuals or families as tenants. Many property owners in metro cities prefer corporate tenants over families or an individuals because one can get good rentals, timely payments and the agreement can be for a long term of 4-5 years in comparison to 11 months for individuals or families,” adds Sen.
Setting the right expectations
The huge demand for renting a house in Delhi-NCR, has led to a change in expectations. While annual rent is the most important factor, tenants are increasingly looking for value-for-money. For example, better connectivity owing to the Delhi Metro, has led to a surge in people looking for rental accommodations in regions that were earlier ignored. The changing ground realities, also mean that landlords should do a lot of homework, before renting out their premises.
The owner of the property, should thoroughly study the area and the prevalent rental trends in the location, says Geetanjali Anand, director of Andy Home.
“The first step, is to ascertain the correct rent amount. The main factors that decide this are the capital value, amenities provided, location and demand. One can charge a premium, if the house in consideration is maintained and furnished well,” explains Anand.
General precautions for landlords
Irrespective of the location of the property in the NCR, there are many general precautions that landlords should always take, adds Sen. “The rent agreement should be drafted carefully. It should include all the terms of the rent, purpose of tenancy, whether the premises will be used for residential or commercial purposes, date of commencement of the agreement and its duration, the rental amount, mode of payment and advance rent paid, security deposit and its refund, clauses pertaining to termination of the agreement, frequency and rate for rent escalation, notice period and lock-in period, etc. It is always essential to do a thorough background check of the tenant, by conducting police verification of the tenant,” concludes Sen.