Tips for landlords to minimize risk when renting out property
23/06/2017 16:01 | Source: Vnexpress
Specifying purpose of use and the number of tenants, asking for security deposit,...can help lower risk when renting out your investment property.

Specify the purpose of use

Nowadays, most rental agreements contain provisions on the tenant's use of the rental homes. However, many people do not pay attention to this issue. The unclear agreement makes landlords fail to achieve the purpose of managing thier properties.

For example, an agreement states that the purpose of renting is "for business". It is too general, unclear! There will be some kinds of business that you do not want it to take place in your home. Therefore, you should write the purpose of use as detailed as possible, then tenants do not misunderstand that they can do everything they want in your home.   

Limit the number of occupants in your home

Tips for landlords to minimize risk when renting out homes

The rental agreement needs to limit the number of people who can live in the rental home. Otherwise it will lead to an increase in the number of occupants, increasing natural wear and tear of property.

Collecting security deposit

In fact, a security deposit is a kind of insurance for home owners. You put yourself at risk when allowing a tenant to move-in without paying security deposit. If a breach of rental agreement occurs, security deposit will protect you. Even though you are allowed to sue a tenant for the money they owe you, it is often impossible to actually collect this money. Security deposit offers you some buffer to soften the blow of the lost amount of money.

Make a detailed handover record on property status

For luxury homes with valuable furniture, a detailed handover record on property status is extremely important. It creates evidences to serve as a basis for resolving the dispute when tenants damage homes or change furniture. 

Consult a lawyer

The higher value of rental agreement is, the higher risk you may face. Therefore, in such cases, as a landlord, you should actively consult a lawyer about the agreement’s content or ask the lawyer to draft a new rental agreement for you. This minimizes risks or at least helps you understand and foresee the risks you may deal with.