Rents in the major IT hot spots in Bengaluru went down by 2-3% in Q2 2018 in some places and stayed stagnant in other areas according to an article in The Times of India. These include places like Whitefield, Electronic City, Sarjapur Road and Bannerghatta Road. The abundance of apartments in Bengaluru City is what is to blame for the low rent rates according to the news website. When you are becoming a private landlord you need to consider certain factors for you to succeed in the rental property market.
Study The Market To Set The Best Rent
Before you decide the amount to charge for rent, the first thing you should do is study the market. It doesn’t matter how big your rental units are, rents are mostly decided by the market, location and amenities provided. In the case of Bengaluru, there is an oversupply of apartments, which means that if you charge higher than the market rate, you may never get tenants.
However, if you feel the rent is too low, just maintain and furnish your property better than other properties nearby, then ask for a premium. In this case, finding a tenant may take longer, but you will get the rent price you want. Another way to calculate appropriate rent is by determining the capital value of your home. From here, calculate 2.5-3% of the capital value, and the result will be the appropriate annual rent for your property.
Choosing the right tenant
Once you decide on the appropriate rent to charge, develop a screening method for finding the right tenant for your property. Things like income, tenant’s rent history and credit worthiness should be included in your screening method. You should also ask how long the tenant wants to stay in your property. A year or longer is great for tenant stability.
Another sign that a tenant may be right for your property is if that tenant is able to pay a security deposit and the first month’s rent in advance. If a tenant tries to bargain over the deposit because they cannot afford it, that may be a sign that the tenant is not financially stable. It is important to take precautions to protect yourself, even if a tenant is able to pay deposit and first month’s rent. You can buy rent-guarantee insurance if a tenant fails to pay rent. However, due to the high supply of apartments, you will need to advertise your property for the tenants to come.
Advertise and tenants will come
Thanks to the hi-tech environment of Bengaluru, you will find a number of start-ups that can help you with SEO, social media marketing, e-mail marketing and content marketing. You may also save some money by doing the social media advertising on your own. All you will need to do is upload the details of your property, including photographs if possible, on social media. If you are not tech savvy, either advertise in newspapers for a fee, or approach a broker.
Bengaluru will continue to attract people who want to work for exciting new tech startups. So if you want to invest in property in the city, go ahead, but do so with caution, and research the market well beforehand.
