Several non-resident Indians invest in the Indian real estate market every year. While some purchase for their family or those who plan to come back to the country, several purchase property for investment reasons. Among those investing, the intention is to earn steady rental earnings.
If you are an NRI who has bought a property and want to give 2 BHK flats on rent in Hyderabad for rental income, you should know about the following aspects:
- The rule is that you have to pay tax in the country from where the income is generated. Thus, if you are getting a rental income from the property you have bought in India, you are accountable for paying the tax in India, regardless of which country you stay in. You do not have to pay tax on the total rental income. There are a few deductions you can avail of. To determine how much of your rental earnings are taxable, think about the following assumptions:
- Taxes paid to the municipal authority concerning the concerned property which has been rented out
- Standard deduction at a 30 % rate on the taxable cost
- Interest paid on loan availed for repairs, construction, or renewals of the property.
- When you are an NRI and have properties in India, it is important to ensure all ownership documents are updated and know all landlord rights. Another important thing is to utilize and derive the commercial advantages from the property, whether it is commercial or residential property. Thus, the rented property generates a steady source of earnings for the NRI landlord residing overseas. Hence the property can be used in your absence by giving it on rent or lease.
- If you want to give out your North Goa rental house, the significant pace is to look into your tenant. You should check into his background, credentials, and reputation in the market. If a tenant has a good reputation, tenant disputes and violations are less. The key purpose of renter screening is to help locate authentic renters who will pay rent on time and look after your property.
- After finding a good tenant, you should execute a formal agreement with the tenant, complete in each aspect. To secure a landlord’s interest in the property, the Rent Agreement must be executed properly and under the guidance of a property attorney. A landlord must ensure that all the terms of the agreement are clear and the usage of the property is mentioned in the contract. It is vital to include all clauses regarding the lease period, payment manner, consequences of non-payment of rent, the notice period for eviction, etc. Hence, it is crucial to have a systematic, well-written lease agreement or rent agreement. Moreover, it is important to renew the agreement on the expiry of the original agreement timely and to review the terms therein.
- A landlord must not discard their property and must carry on watching their property and protect their landlord rights. After giving out 2 BHK flats on rent in Hyderabad, a landlord should ensure that his/her representative visits the property regularly and keeps a check on the property, its condition, and the fact that the tenant uses the property only for the purpose mentioned in the agreement. Also, such a representative must note any unlawful construction or change of nature in the property made without the landlord’s permission. This will also help the representative determine if the tenant allows the property. It is highly suggested that some part of the property is kept in the landlord’s ownership which can be used on his vacation to India. Lawyers recommend that the payment must be received in the landlord’s account. Landlords must ensure he receives rent in their account instead of being collected by their representative through the bank or in cash.
- The landlord should communicate with the tenant throughout and must keep a check on his location and conduct. This will assist the landlord in staying well-versed in the tenant and his behavior. Moreover, this enables the landlord to stay up to date about the tenant’s rights toward the property. Managing your rental house might not be your key job, but it is still a business and a source of additional income. It is essential to stay qualified with your renters, keep your funding integral, and perform methodical tenant screening prior to renters moving in. Hence, it is suggested that proper legal advice be taken from a property attorney before the NRI landlord offers the North Goa rental house for rent. All the suitable inclusions can be made in the rental contract, and an NRI does not have to experience any problems with their property on rent in the future or infringement of his/her landlord rights. As an NRI, one needs to guard the landlord’s rights and avoid needless legal issues.
Though the rental processes have been made easier for NRIs now, it is secure to offer your power of attorney to any reliable resident of India who can take care of your legal formalities like renewing agreements, signing documents, and others in your absence. Moreover, it is always sensible to get in touch with a professional lawyer rather than take an idea from the real estate agents to draft the rental contract. This will ease the situation and make your renting process stress-free.