You are probably wondering how much you can earn from renting out your flat. Your family and friends will tell you what they have heard is the current market rate. The brokers will tell you another thing ,but how do you know if your flat is worth that or more?

Well, apart form the carpet area of the flat, here are some things to determine the rent value of a flat.

• Location

If the flat is located in a prime area in the city, the rate you get is higher. Also if local stores, shopping malls, schools, railway station and bus stops are close by you can demand a higher rent.

Also Read: First Time Home Buying Guide

• Furnishings

If you are renting out a fully furnished flat with furniture, appliances etc. and all the tenant has to do is move in, you will naturally get a higher rent. If the flat does not have everything in it, you will get slightly less and even lesser if the flat is completely unfurnished.

• Floor

The higher the floor, the more you can demand especially in cities like Mumbai where ground floor flats face the danger of flooding during monsoons. However, if you are on a high floor and the building does not have a lift, the rate goes down.

• Condition of the Building

If your flat is in a building that has good upkeep, the rent you draw will be higher. Also if the building has facilities like a 24-hour watchman, constant water supply and electricity, parking space etc. you are bound to get more rent.

Drawing Up an Agreement + Other Formalities

Prior to renting out your flat you must obtain a NOC (No Objection Certificate) from your housing society that allows you to give your flat on rent.

Also Read: Housing Society Woes

When drawing up a Leave and License agreement, here are some clauses you must add clauses that state the following.

• The method of payment of both the deposit and the monthly rent.
• No alterations can be made to the apartment and there will be no removal of fixtures or structural changes etc.
• The tenant has to maintain the apartment in the same way it was given to him.
• List all the fixtures, pieces of furniture etc. given to the tenant in the flat.
• You can enter the flat for inspection at any time after giving the tenant prior notification.
• No illegal/ immoral activities can be carried out in the flat.
• Electricity and phone bills as well as parking charges will be borne by the tenant. However, you will be responsible for paying society outgoings.

If you have involved a broker, he will take care of drawing up the agreement and having it registered as part of his charges. If not, you will have to do it yourself. The amount that is charged will have to be split equally by you and the tenant in either case. Thereafter, police clearance will have to be obtained by the tenant.