Previously, exclusively transacting high-value assets like real estate assets across digital channels was not a norm. Offline real estate transactions often involved face-to-face interactions with different parties.
However, blockchain has made it possible to change this. Assets like real estate can now be tokenized and exchanged like cryptocurrencies like bitcoin and for that, we need to say thanks to the advent of smart contracts in blockchain networks.
This method of real estate trading has its advantages and drawbacks. Here are six aspects in which the blockchain has altered the real estate industry.
The commercial real estate (CRE) industry has recently embraced and adopted blockchain technology. CRE executives are discovering that smart contracts built on the blockchain will play a far bigger role in their business. Property transactions such as acquisition, selling, funding, leasing, and management transactions may all be transformed through blockchain technology.
1. Marketplaces and Channels
The focus of real estate technology has historically been on listings and linking buyers and sellers. However, blockchain opens up new avenues for real estate trading, allowing trading platforms and online marketplaces to provide more robust support for real estate transactions.
2. No Intermediaries
The real estate ecosystem has long included brokers, attorneys, and banks. According to a Deloitte survey, however, blockchain could soon usher in a change in their positions and involvement in real estate transactions. Listings, fees, and legal paperwork are all features that new services will potentially take over.
3. Transparent Real Estate Transactions
One of the major issues in the real estate industry is transparency. Because of its decentralized existence, blockchain guarantees that the entire transaction exchange is open to all parties involved. The technology ensures that each property owner or the purchaser has access to information about the desired property, which helps to establish trust. As a result, using Blockchain for transaction exchanges dramatically reduces the risk of fraud.
4. Property Management
Since there are so many people involved in property management, it's a complex task. The majority of properties are typically handled using either manual paperwork (offline) or various software systems that are difficult to integrate. The entire property management mechanism is now being handled effectively using a single decentralized framework that uses blockchain-backed smart contracts. Anything from signing lease agreements to managing cash flow to filing maintenance requests is being done safely and transparently.
5. Automated Property Buy and Sell
The method of purchasing and selling real estate takes a long time. With all of the challenges, the sector is quickly slipping behind. As a result, smart contracts in real estate will simplify the process of buying and selling homes.
In fact, blockchain has the potential to automate the entire home-buying process. Consumers can access a website where potential sellers can showcase their assets. When they've settled on one, they can either go see it in person or take a virtual tour. They just have to set up the conditions and process the payment after that, and they're done.
6. Preventing Title and Deed Fraud
The avoidance of deed and title frauds is another blockchain real estate use case. You won't believe how many problems deed fraud has created in the last ten years. In fact, this type of fraudulent activity is on the rise, particularly in the realm of online property sales.
People may even sell their properties to a third party without your knowledge, which is frightening, to begin with. However, since blockchain will store all property details, owner information, and legal documents on the ledger, no third party would be able to take ownership of your properties.
The democratization of real estate properties is possible due to blockchain technology. It offers potential investors from all over the world the opportunity to try their hand at real estate investment options. If done correctly, this can be highly beneficial to the crypto-space, as it will improve the real-world value of tokens. The frightening part is that we've just scratched the surface of what the marriage of blockchain and real estate will achieve.
How To Attract Great Tenants?
Do you also feel stressed while renting out your property? If yes, this is a good place for you to start. Finding good tenants can be hectic, especially when you are a new landlord with little experience.
As a landlord, you want to protect your asset, but you do not want your rental homes to remain vacant for a long period of time because this can damage your profit potential. While you might be curious to rent the property quickly, renting your property sounds desirable however tenants may cause you difficulties. For example, if you end up with a tenant who does not pay rent on time, throws tantrums. Such tenants would be considered as a threat to your property and your image, it can cause a lot of loss for you and your property like in terms of getting more offers from other suitors seeking a good rental home. According to a survey, if you ask a tenant to evict your property, it may take up to 3-4 weeks and can cost you a great deal.
Listed below are some of the important things to remember for the best possible results when finding a good tenant for your rental homes.
Advertise through different mediums.
Most landlords do not like their rental homes to sit empty for a long time. The more your rental property sits vacant, the more money you lose. Fortunately, we live in a digital era! In today’s time, there are several options and most of them are free. Advertising a rental home for rent is easier than ever!
While there are a lot of options out there like online marketing, posters, articles, blogs, and websites that attract suitor’s attention towards the advertisements, social media platforms like Facebook, Google, Instagram, and the likes are other great platforms for advertising rentals.
It's important to advertise rental homes offline as well. Share the information that you have rental homes available for leasing with those you know. You never know who is looking for a rental to stay, and it can be a great way to find desirable and qualified tenants before taking your marketing efforts online.
Other methods of advertising rental homes could be posting your rental property in the newspaper or creating brochures to send via direct mail or post on bulletin boards at local schools, restaurants, or shops, colleges, a market where it matters most, putting forth the most effort on the platforms that profit the most results.
Make a list of necessities that you will provide to your tenants.
Each tenant has different requirements for their rental homes. When they see an advertisement or even when they hear about a place from somebody, tenants want to know the entire package they will be getting from the place. It’s just not about the four walls but also other necessities like water, electricity, security, Good condition of the house, storage space, environment, neighbors, parking and so on. Hence, one of the most important things is to list out all the necessities that you will be providing your tenants along with the property.
In that case, what is better than a picture! We all have heard the saying, “A picture is worth a thousand words.” Today’s digital world is all about images. Nobody wants to read out something that does not have attractive pictures. If you look at the statistics for listings that have pictures versus the listings that don’t have pictures, you’ll get the answer. When your rental advertisement includes photographs, you receive 95 percent more views than advertisements that do not have photographs.
Tenants who are looking for rental homes will spend the majority of their time scrolling through the photos in your ad. So, it’s clearly important that you get this part right.
Here are some ideas for you to include pictures in your advertisement –
The second most important thing while listing out the necessities is that you match the photos with accurate, engaging, and interesting descriptions. The description is what ties your whole story together. It also helps your searchability with great SEO, which ensures your listings are found by potential tenants. The description should include two different sections: the headline and the description or the summary.
The headline is the first thing that someone notices when they’re viewing a listing, and many people will decide whether or not they want to keep reading based on the headline. So, it’s recommended that you follow a formula when you’re writing a heading for your rental property advertisement.
One suggested formula is – Amount of Rent Price + Number of Bedrooms + Number of Bathrooms + Type of Property + Location + Great Selling Point
Though it looks like a long heading, it’s okay because it includes the most relevant information and gives your prospective tenants a good reason to keep reading.
Here’s how it would look like if you’re renting a property in Shalimar Bagh Delhi.
7,000/- 1-bedroom 1-bathroom flat in Shalimar Bagh with stunning views.
This headline immediately tells prospective tenants whether the home is in their price range, desired location, and target size.
Once you’re done with the headline, the summary comes next. The summary section is also important; it allows you to finish telling the story and to tie your headline to your photos. This section of the ad helps the potential resident visualize what your property is like. You should highlight the amenities that are available or the unique features. Include adjectives and describe what the neighborhood is like. Include a map or other important information that will add value to your listing.
Also, make sure to highlight the restrictions like no pet policy and so on in your ad beforehand. This ensures that you are not attracting the wrong tenants. Be transparent and share all of the important information a tenant may need to know.
Conduct a Comprehensive Tenant Screening with Credit, Criminal and Eviction Reports
A brief conversation with a previous landlord can help to confirm the information on the reports and inquire about things that the reports don’t show, such as:
The biggest landlord pain point is non-payment of rent. While a credit report is a great measure of a prospective renter’s financial history, it is important to verify employment and income. The landlord needs to be confident that the prospective tenant has the means to pay the rent. To that end, running an Income Insights report can determine if the potential renter’s self-reported income needs further verification by analyzing the applicant’s credit behavior and other factors. This can save landlords time and effort having to manually verify income as well as reduce risk.
Maintain Mutual Respect to Retain Good Tenants
Once you find a good tenant, a mutually respectful relationship will help to ensure the longest possible stay. Just as you expect them to pay their rent on time and keep the property in good shape; they expect you to be up to date with maintenance and repairs. A lease agreement that outlines all of your policies (number of persons in the rental, payment due date, late fees, pets, smoking regulations, renter’s insurance requirements, etc.) can help to prevent confusion and miscommunication down the line.
Yes, you have to do all of these things in order to attract a great tenant. Sounds hard? We know, and hence, we at propertyangel.in can do all of this hard task and more for you. We can maintain and manage your property and get the best of tenants for you.
Some most common tenant FAQs
Can the landlord visit the premises without the tenant's permission during the rental agreement?
Ans. No, not without the tenant's consent. During the length of the rental agreement, the landlord and his collaborators have complete authority to visit and check his property. This condition should be detailed, and the owner should give the renter enough notice before visiting.
If I am a tenant renting an apartment, why am I obligated to pay the maintenance charges?
This is correct. Maintenance fees are often paid to maintain the apartment complex and common amenities such as the clubhouse, swimming pool, and others, and wages are paid for the security, housekeeping, etc. In most cases, the resident (tenant) of the apartment is responsible for the maintenance expenses since he uses the communal amenities. Otherwise, the owner can pay the maintenance fees to the association and collect them from the renter.
What happens if I rent an apartment without an agreement?
Ans. There must be legally binding documentation of the rental agreement's terms and conditions. According to various conventions and legislation, the lease agreement or rent agreement must be in a specified format. Not having a rental agreement signed by both parties will result in legal inefficiencies in the event of a dispute.
Why is stamp duty important on a rental agreement?
A rental agreement with stamp duty paid is a lawful and legally valid document with evidential value since it is admissible as documentary evidence in courts. To be legally binding, the rental agreement draft should be printed on stamp paper with the appropriate stamp value according to the Stamp Act of each state.
Why is a rental agreement valid only for 11 months?
It is a tradition landowners follow to seal rental/lease agreements for just 11 months to avoid registration with the competent local authorities.A rental agreement that lasts more than 11 months must be registered to be enforceable under the Registration Act of India. To bypass these procedures, contracts are signed for 11 months and then extended by mutual consent of the parties concerned.