–Rental Properties – Real Estate Future Investment.
Rental Properties in India
Rental properties in India , also require hands-on management, but unlike house flips, they have a long-term investment horizon. Any type of property (residential, commercial, or industrial) can be a rental property. Property owners earn regular cash flow usually on a monthly basis in the form of rental payments from tenants. This can provide a steady, reliable income stream for investors, but it also requires a lot of work or delegation of responsibilities to ensure that operations run smoothly.
First, you must find tenants for your property. This may be easy or difficult depending on your property type and available resources for finding tenants. You are also responsible for performing background screenings for prospective tenants (if you choose to) and for providing legally sound lease agreement contracts with tenants. For each month that you do not have a tenant, you miss out on income from your investment.
Once you have tenants, you have a litany of resultant duties. As the landlord, you are responsible for rent collection, property maintenance, repairs, evictions, record-keeping for the properties, and ensuring legal compliance as a property owner and landlord at all times. Depending on the number and size of rental properties that you own, property management can be a part-time or full-time job.
Some real estate investors who don’t want to handle the management of a property contract a property management company for a fixed fee or percentage fee of earnings. This takes some weight off an investor’s shoulders, transforming the real estate into a more passive investment. However, this tradeoff also means that an investor cedes some control of their properties and lose a portion of their monthly income.
Short-term rentals allow residents to rent out their homes on a nightly basis, usually as an alternative to a hotel. Short-term rentals are similar to rental properties, but they are confined to residential properties and usually only available for short-term periods. Unlike traditional rentals, short-term rentals, typically powered by companies such as Airbnb and VRBO, let you rent out a portion of your home or your entire home. Owners earn money by renting their property by the night, which can provide regular or irregular cash flow, depending on the demand of the property within its specific market. Property owners are responsible for furnishing and maintaining the home for renters.
Short-term rentals usually require much less expertise and supervision than traditional rentals for several reasons. Third-party websites, such as Airbnb and VRBO, facilitate the booking of the rental property and create the contract agreement between the property owner and renter. Because third-party companies manage several components of the rental process, short-term rental properties can be a part-time job or side hustle.
While short-term rentals can be a lucrative solution to the spare bedroom in your home, before listing, it’s important to be well-acquainted with the laws governing short-term rentals in your area. Homeowner associations have the power to ban short-term rentals, and in some cities, such as Bangalore, Mysore, Mangalore, Belgaum, Bijapur, Gulbarga, Dharwad, Nagpur, Gurgoan, Delhi, Hubli, Chennai, Mumbai and Delhi, there are existing restrictions against types of short-term rentals. And, even as a short-term landlord, it’s important to make sure that you’re prepared to handle any issues that may come up hosting short-term renters.