6 tips you can adopt for renting property in a slow market
Generally, renting property in a sluggish market needs to be undertaken with caution. However, the deal can prove to be to your advantage, if executed effectively. As is generally seen, there is a decrease in demand for rental housing during slower economic conditions compared to the demand in a boom period. Creation of lesser jobs and low migration during such periods can be reasons attributed for such a scenario. Property owners also try to make use of all the resources at their disposal, thereby maximizing the income from their respective properties.
Some of the practical strategies that a tenant can follow while renting out property in a slow realty market are listed below:
1. It is imperative that a tenant should undertake extensive research before finalising any property. Based on the market conditions prevailing, affordability can be enhanced considerably. In a sluggish market, it is always better to look out for a more favourable property market. Widen your options and look for a property that is located in an area of your preference. now, there is a greater chance that areas/properties that you felt were beyond your budget would be affordable.
2. It is a known fact that payment of a deposit and brokerage charges need to be paid for renting out a property. It is possible to negotiate both these payments with the broker and landlord respectively.
3. Successful negotiation of the deposit amount with the landlord will work out if you are able to project that you have a stable job and that your financial condition is healthy. References of your previous landlord/landlords can also be given which will enhance your reputation in the eyes of your present landlord. It would be a nightmare if a landlord has to change tenants frequently primarily due to factors like non-payment of rent, creating disturbances, misuse of property etc. Hence, it is important to take the landlord into confidence. Thereby, it will enable the tenant to negotiate on other aspects like a longer lock in period, lower increase in annual rent etc.
4. It is the responsibility of the tenant to ensure that the rental property is in good condition and includes various fixtures like plumbing, sanitation and lighting. The tenant should ensure that the liveability of the rental property is good. The tenant can also suggest changes in the property according to his requirements. This can include suggesting for better quality painting or provision for additional furniture.
5. Another aspect that needs to be looked into seriously is the maintenance cost, including overall maintenance costs. They include component such as monthly fees of the homeowners’ association, taxes, fees for other facilities like gym, swimming pool, clubhouse etc. Negotiation can be done on such additional charges based on the usage of the tenant.
6. It is important that the tenant does a comparison of rental properties in the vicinity before he decides on a particular property. Negotiation of the rent holds an important part while finalising the deal. The prospective tenant can decide on the deal of his choice by making a comparison of the per sq.ft. rentals existing in the locality. Investigating through brokers will enable you to compare rental values of different rental property prevailing in the locality. Another means of comparing rental values is through online portals. As per Indian standards, rental yields hover between 3-6 per cent of the property value. For rental property with a rental yield more than 5-6 per cent, then the tenant needs to be aware as to the attributes that have propelled the rental value of the property as well as his rationale in paying the same.
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9 tips for a buyer to close a profitable real estate transaction in a slow market
