Renting out a house is a steady source of income, but a careless start can lead to unpaid rent, damage or long disputes. Use this checklist before you hand over the keys. See what similar houses earn in your sector on the Rental Trends page.
1. Set the right rent
- Check community-reported rents for your sector, house type and furnishing level on Rental Trends, and compare with 2-3 similar houses nearby.
- A rent slightly below the market often brings a good tenant faster than a long vacancy at a higher price.
- Decide in advance what is included: maintenance charges, water, parking, society fees, furniture and appliances.
2. Know your tenant
- Collect a photo ID and address proof (Aadhaar, PAN, passport or driving licence) and keep copies.
- Ask for employment or business details, an office ID card or a recent salary slip, and a reference from a previous landlord where possible.
- Complete police verification of the tenant as required in your city. Many cities have an online tenant verification form. It protects you if something goes wrong.
- Note the number of people who will live in the house and make this part of the agreement.
3. Always sign a written rent agreement
- Use a proper rent agreement, registered or notarised as per local rules. Agreements longer than 11 months generally need registration and stamp duty, so many owners use an 11-month agreement and renew it.
- Include: names and addresses of both parties, property address, monthly rent, due date, security deposit, lock-in period, notice period, yearly rent increase, maintenance and utility responsibilities, permitted use (residential only) and rules on subletting.
- Attach the inventory list with the condition of fittings, furniture and appliances, ideally with dated photos or a short video.
4. Security deposit and rent increase
- Deposits are commonly 2-3 months of rent for houses and flats. The Model Tenancy Act 2021 suggests a maximum of 2 months for residential property; check what applies in your state.
- Write down when and how the deposit is returned and what deductions are allowed (unpaid rent, utility dues, damage beyond normal wear and tear).
- Agree on a yearly increase, typically 5-10 percent, and put it in the agreement so there is no argument at renewal.
5. Take payments the safe way
- Prefer bank transfer or UPI so there is a clear payment record. Give a rent receipt every month if asked.
- Avoid large cash payments. Cash deposits and rent are difficult to prove.
6. Tax and compliance
- Rental income is taxable as income from house property. A standard deduction of 30 percent of the net annual value is available, and home loan interest may also be claimed. Declare the rent in your income tax return.
- Tenants paying more than Rs. 50,000 per month may have to deduct TDS. Property tax and society charges stay with the owner unless the agreement says otherwise.
- GST and tax rules change often. Please confirm the current rules with a Chartered Accountant.
7. Keep the house safe and in good condition
- Make sure electrical wiring, gas connection, water supply and fire safety are in working condition before handover.
- Decide who pays for routine repairs (usually tenant for small items, owner for structural and major repairs) and write it down.
- Inspect the house once or twice a year with prior notice to the tenant. Do not enter without informing the tenant.
8. Handover and exit
- Hand over the keys only after the agreement is signed, the deposit is received and the inventory is signed by both sides.
- At exit, check the inventory together, settle all dues, take back all keys and return the deposit as agreed.
- If the tenant does not pay or refuses to vacate, send a written legal notice and approach a lawyer or the rent authority. Do not cut utilities or lock out the tenant, as this can be illegal.
Help the community: share your rent
Owners who share their rent anonymously help build reliable rent averages for every sector. Submit your house on the Rental Trend survey (you can add up to 3 houses). Individual details are never shared.
This article is general guidance, not legal or tax advice. Rules differ by state and city. Please consult a lawyer or Chartered Accountant for your situation.
