While the real estate sector seems to be on the road to recovery, homeowners have found the best means to cash in on their immobile assets — by letting it out and moving into a smaller space as tenants themselves. Such individuals and families claim the trend to be a convenient way of handling the cost and security of their property.

“Renting out furnished apartments in prime areas can fetch around Rs 40,000 or more per month — with the amount escalating if it also has a compound,” says Murari Prasad Sitaula, a resident at Ranibari.

“Meanwhile, if one moves into an unfurnished flat for Rs 10,000, it means not just surplus of Rs 30,000 excluding the miscellaneous costs, but your property is also being looked after and maintained at the same time.”

As attractive as it may sound to have an extra house, owning a rental property can be a major headache if the deal is not struck right. According to Sitaula, one has to be careful when renting out because sometimes costs add up and one may end up paying more than what they actually earn. “Opposed to few years ago, I now reside in my own house, since my children have grown up and with a bigger family, expenditure is higher along with the need for increased space,” he says.

The areas within the ring road, furnished apartments and houses in residential areas reportedly fetch higher rents than those in nearby sub-urban and outer ring road areas. While letting out, the location of the house, its day-to-day maintenance and furnishing matters as much as the size of the landlord’s family.

“There are just two of us in my home, thus renting out our big house was a practical solution for us. With both me and my husband having full-time jobs, renting a smaller space for ourselves lets us be more carefree and not worry about queues to pay bills or leaving our house locked,” says Pooja Bhandari, criminal defence lawyer at International Legal Foundation.

While informing that it is very essential to regularly oversee the maintenance of your rented property, she says, “The good thing is, we are now able to go on long vacations without worrying about our property.”

According to her, providing a safe, smoothly functioning home for your tenants is just as important as getting such facilities from your landlord. She also informs that office, college, relatives’ residences, public transport, space, et cetera play an important role in one’s selection and rent.

Echoing Sitaula, Bhandari also emphasised the need for clear cut agreements and understanding among the involved parties to avoid conflict and confusion. While people from out of the valley continue to pour in, raising the demand of living spaces in Kathmandu, those who already own property in the valley seem to be faring well by renting it out.

While juggling the role of landlord and tenant:
• Regularly visit the rented out space
• Maintain your apartment as you want yours to be maintained
• Check if the bills are regularly paid on either side
• Keep track of market price of rent
• Give a spare key to landlord but keep in mind to put your valuables away when leaving the house, especially for a longer period
• Keep separate metres for water and electricity so that you are not cheated into paying more by both sides
• Make a clear contract with the landlord and the tenants

source: The Himalayan Times, 17 March 2012