What you need to know about renting out your placeThursday, April 28, 2016
Thinking of renting out your space? You will go through the usual motions but there are some things learned the hard way – through experience. You already know the basics: advertise, do a background check on your tenant, and make sure all your documents are in order. Real Estate Broker Mitor Alipio shares essential tips beyond the usual advice for renting out your house, apartment, townhouse or condominium unit.
Choose the right broker for you
You need to find one that fits just like any relationship. There are several kinds of brokers (lease, sale, commercial, residential) therefore find someone who specializes in the type of space you own. You will need trust and a good working relationship with your broker so chose wisely. Ask for referrals from friends and family first before looking anywhere else. First hand information and someone vouching for the broker is always best. A broker is more than a person who finds your renter. This person can facilitate the necessary paperwork and can help furnish the property. Try to find a broker willing to manage your unit as well. Tasks include paying dues and aiding in repairs. This is a service that is not done by all brokers. There are a lot who disappear once the sale pushes through so it’s best to get a broker with excellent after sales service. This gives you the luxury of convenience.
Do you need an SPA (Special Power of Attorney) to lease your property?
An SPA or Special Power of Attorney is a document giving a person the authority to execute decisions and sign documents in your behalf. If you travel often or are extremely busy, it is recommended to get one. The SPA is especially beneficial for landlords who are not based in the Philippines. It can be as simple as being unable to attend a meeting between you and your occupant. The transaction can go on smoothly if your representative is present. Mitor shares that “The SPA document should be complete. I had a client who showed me their SPA document but it did not have details of the condominium unit thus it was deemed invalid. We had to redo the SPA.” Do make sure that you give the SPA to someone who can represent you properly and is trustworthy. Lawyers and notaries have the format of the SPA document.
Know the difference between a semi-furnished and fully furnished space
There are still a lot of people who confuse the two. It is imperative to distinguish them to taper expectations. Rental rates for these 2 types vary significantly. Do not expect fully furnished rental rates when your space is semi-furnished. Mitor explains the difference. “Basically a fully furnished unit is complete, all you need to bring is your luggage. Even the cutlery is included.” He adds, “A unit is regarded as semi-furnished when it has major appliances like a refrigerator, gas burner, microwave, washer & dryer, TV and an air-conditioning unit. The renter will have to bring in his own furniture.”
Be through about turnover
Always have an inventory checklist when you turnover the space to the occupant and when it is returned to you. Make sure that the inventory checklist is dated and signed by both parties. Mitor shares “It is better to have photos with your inventory checklist. If the lease is for a year, you may forget some of the details of your space. If anything is damaged during the occupant’s stay, it is easy to determine if the damage was incurred after turnover. The photos and inventory checklist track accountability. They help minimize conflicts and problems.”
Have the right provisions in your contract to protect you
The deposit, advance and repairs are standard protocol of contracts. There are other factors to include in your contract like the number of occupants. You don’t want your 2-bedroom condominium unit turned into a dorm for 10 people or your unit being subleased without your consent. Mitor shares “It is important to specify the use of the property. If the contract states that the unit is to be used for residential purposes but the tenant uses it for something else, you can terminate the contract.” You wouldn’t want to get the shock of your life when you see your unit being used for something illegal and is raided on national television.
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