Protecting property: Before you decide to let
If a flat owner does not have any pressing priorities, he must compare the monthly rent against the maintenance outflows. When deciding to choose the flat in which he would live and the flat to be let out, the owner should compare factors such as location, age, neighbourhood, common amenities, size, facilities, outgoings or expense towards maintenance etc of the flat, proximity to amenities and connectivity.
If these are better, it is wise to stay in that locality and let out the other property. Initially, the yields versus outflows may have a gap, but can eventually be squared as rents would increase with time.
The rent is usually based on the capital value of the premises. It is usually 2.5-3 per cent of the market value. For example, if a 2 BHK flat of 700 sq ft commands a market valuation of R30,000 per sq ft, then the capital value is about R2.10 crore.
The 3 per cent of this value is R6.3 lakh per annum translating into a monthly rent of R52,500. The flat owner should set a target of R50,000 to R60,000 depending on other value factors.
If a building