The practise of transforming a property into a paying guest (PG) lodging is gaining traction, particularly in metro centres that see a significant inflow of student and working professionals each year. As this lucrative company has piqued the curiosity of many property owners, 99acres presents important considerations to make before converting your house into a PG.
Paying guest accommodations continue to be the most popular option for students and working people because to the convenience and flexibility they provide. The idea is gaining traction in larger cities, particularly among young people who want to feel at home.
Before turning your house into a PG, keep the following points in mind:
What are the legal requirements for turning your house into a PG?
By transforming your home into a PG, you are changing the type of accommodation from residential to commercial. Because you will be receiving money rather than renting the services, it will be recognised as a commercial property that must adhere to specific legal formalities and rules.
It is necessary to obtain municipal permissions for such adaptations in order to run a residential property for commercial purposes. Co-operative societies typically resist such plans; hence, authorization must be obtained in writing at a general body meeting to avoid future problems. Noncompliance with legal requirements may result in the closure of a firm, resulting in a considerable monetary loss.
What security precautions should you take before converting your house into a PG?
Before establishing a PG accommodation, consider the security measures, especially if the house will be rented to females. “Innovation and technology might be an assistance to avoid any disaster when you want to give your house to female paying visitors,” says Sumit Aggrawal, Interior Designer at Homzkraft. Furthermore, from a security standpoint, a watchman and CCTV installation are absolutely important to record all accesses and departures.” In addition, notify civic authorities in your region about the property conversion to avoid future complications.
What background checks should you conduct before turning your house to a PG?
It is critical to get to know your guests before renting out your house. As a result, properly verify the papers that serve as identification verification, such as a passport, adhaar card, official id, or college id, and preserve a photocopy for future records and reference.
Another key document that the resident must fill out and sign is the rent agreement. Aside from providing the lessee’s background information, the rent agreement serves additional functions. For example, if you intend to change the rent amount on a regular basis, say once a year, put it in the contract. When the renter signs it, it represents his/her agreement and protects you from any future problem.
What facilities and personnel arrangements are needed to transform your house into a PG?
Providing PG services necessitates significant costs. The minimal minimum facilities provided by PGs are a bed, a wardrobe, and a room cooler, which may be purchased separately. You’ll also need to pay somebody to clean the rooms and bathrooms, as well as a watchman and a caretaker to keep an eye on the property. Consider the marketing costs associated with advertising the PG and attracting renters.
What are the costs associated with turning your house into a PG?
The conversion of a residential home to a commercial property modifies not only its appearance but also your monthly expenditures and costs. While renting out your house to several visitors can enhance your revenues, it will also raise your liabilities because all amenities such as electricity, gas, and water will now be charged at a commercial rate. Furthermore, the property tax levied would be based on commercial property rather than residential property.
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