Home owners, 13 March

For home owners

Useful advices for letting an apartment

Letting an apartment is a great way of complementing our earnings. In case of more than one apartment letting can cover our whole income. Still many people are afraid to have a go at letting. One of the main reasons for this could be that the process seems difficult at first sight. However, with looking up a few things and holding up to some rules our apartment can become a fine profitable property. There are quite a few real estate managers who can take the burden from our shoulders (find help at roommatesbudapest) but there are some things that need to be considered before signing the contract with our future tenants.

If you are at the other side and are looking for an apartment to rent, take a look at this post: Moving to Hungary

Regardless of the property being an investment or a home we live in, it holds value if it is modern and in a new state. Attention should be paid to maintaining the apartment in a good state. A sanitary painting does wonders to every apartment and it should be repeated in every few years. Painting is also needed if you smoke indoors as it can soak in the walls. In case of a furnished apartment, it should be let with clean curtains and bedsheets. There are cleaning services who offer help with cleaning.

We should consider if we would like letting an apartment furnished or unfurnished.  If we decide letting it furnished, adapting to the given layout is a must. Dividing the disposable space can help determine how many people the apartment can take in. The more separate rooms we can manage to partition, the more people can move into the same space. After determining the number of rooms, it is easier to purchase the adequate furniture. In case we are unsure how to furnish our apartment and make it stylish interior designers can help.

Keeping our apartment in a good state is an important aspect even while tenants live in it. Before signing the contract, it is a good idea to turn our attention to the future tenants. If possible, we should meet up with them personally not only in the apartment. This way we will have a chance to check their personality and turn of mind. During a casual conversation like this we can also get to know a lot about their financial situation, so we should not let this opportunity to learn about their job and income slip from our hands. It is also recommended to clear up the issue of pets and in case of a foreign tenant the origin of them beforehand. We should talk openly of these matters and reassure the future tenant that these precautions are not meant to offend them, since we would only like to make sure of them presumably being able to pay the rent and retain the state of the apartment on a long-term.

The tenant can ask a certificate from us to confirm our ownership of the property. We can confirm this legitimately with a title deed not older than 30 days therefore it is advised to prepare this in advance. It is not recommended to use an old sales agreement instead of the title deed since the information in it could be outdated. Obtaining a title deed is possible even online from the Land Registry (Földhivatal) for a fee.

Another important document our tenant can ask for before signing the contract is an energy performance certificate of the property. A copy will also do in this case. There are several companies who can make the certificate. We should look out for the ones who employ engineers who are registered in the list of the Hungarian Engineers’ Association (Magyar Mérnöki Kamara).

Before receiving any income it is of utmost importance to notify the National Tax and Customs Administration of Hungary of our activity. In case of questions it is recommended to speak with a tax advisor.

The contract itself should be a written agreement to be valid. It should include any kind of matter that could be the root of a misunderstanding later. Information that should not be left out is the interval of the letting, the rental fee and any other costs that could occur and how much of these is the tenant obligated to pay for (consider the utility costs and common charges). To calculate the utility costs we can use old invoices. We can also show these to the future tenant. Do not forget to check the heating’s cost in summer and in winter also.

In case of letting the apartment furnished, we can make a report in addition to the contract. In this report we list the furniture in the apartment in a way they could be checked when the tenant is moving out. It is worthy to take a notice of the state of the furniture to prevent later arguments about who scratched the table or about the not working functions of the electric cooker. This is not the lessor’s interest only but also the tenant’s. The best is if we can make the report together with the tenant. Have them sign it and give them a copy of the report.

Letting an apartment comes with a lot of administration. We should keep a record of the incomes. A notebook or an excel file is suitable to register the income and expenses each month. Be thorough and precise. Register every expense (e.g. bought a new microwawe, costs of repairing the washing machine) and its date. The record is not only useful for us, but it can be shown to offices, and we can refer to it in case of our tenant is always late with the rent.

A proof of receipt should be given to the tenant of the rent at all cases. Ask for the sign of the tenant to prove they received the receipt. The receipt should feature the date and the sum of money. It is also a good solution if the tenant pays by wire because all information is recorded electronically. This method suits our ever-quickening lifestyle.

It is a great plan to collect the numbers of reliable technicians and specialists. There could be a problem with a ducting or plumbing, the washing machine or the electric system at any time. When our tenant notices us of a problem we do not have to fluster to find a technician who can come at once but have the solution at hand. If the problem is not the fault of the tenant the lessor pays for the expenses, but if the problem occurs because of the negligence of the tenant, or on purpose, they must pay.  Every other small technical issue which accompanies everyday life, like exchanging a bulb, is the responsibility of the tenant.

There could be a situation when reparation is needed as soon as possible. Those reparations which are essential to preserving the state of the apartment must be tolerated by the tenant (and by this we mean flooding, leakage or pipe breakage). These situations are usually not opposed by the tenant since it is in their interest also to be able to live in the apartment. Recovery works however which are made to improve the apartment can be refused by the tenant while they live in the apartment. In case of any kind of work done in the apartment we should talk to the tenant beforehand. When making appointments we should consider their schedule.

It is understandable if we worry about our apartment’s state while someone else lives in it. It is all right if we sometimes visit the tenant to check on the state of our property, but we should always let them know beforehand and never visit when they are away from home.

If we follow these simple steps we will live in peace with our tenant and we can exploit the great opportunities given by letting an apartment.