The difference between a profitable rental property and a financial disaster often comes down to one decision: who you rent to.
A single problematic tenant can cost you ₹2-5 lakhs in unpaid rent, property damage, and legal fees. A great tenant becomes a 5-year cash cow with minimal problems.
This guide teaches you how to screen tenants properly, manage maintenance, and handle the difficult situations that inevitably arise.
The Real Cost of Problem Tenants
Case Study: The Expensive Mistake
Property: 2 BHK, Hadapsar, ₹50L value Monthly Rent: ₹22,000 Problem Tenant Scenario:
- Moves in month 1
- Defaults on month 3 rent (₹22K)
- Month 4-7: You continue managing property, no income (4 months × ₹22K = ₹88K loss)
- Legal notice and eviction process: ₹20,000
- Property damage from neglect: ₹30,000
- Lost rental period (3 months): ₹66,000
- Total loss: ₹2,24,000 (4.48% of property value)
Cost of Prevention (Proper Screening):
Background check: ₹500-1,000 Reference verification: ₹200-500 Time investment: 4-5 hours Total cost: ₹2,000-3,000
Prevention ROI: ₹2,000 investment prevents ₹2,24,000 loss = 11,200% ROI
Pre-Renting Preparation: Set Yourself Up for Success
Step 1: Prepare Your Property Profile
Document everything:
- Property condition photos (before tenant)
- Exact inventory of furnishings (if furnished)
- Appliance list and serial numbers
- Paint and flooring condition
- Utility meter readings
Why critical: Protects you from damage claims disputes
Step 2: Set Clear House Rules
Document in writing:
- Guest policy (how many, how long, parking restrictions)
- Noise/disturbance policy (quiet hours, party restrictions)
- Pet policy (if allowed)
- Smoking policy
- Cooking restrictions (if applicable)
- Maintenance responsibility (tenant vs landlord)
- Utility payment responsibility
Pro tip: Specific rules reduce ambiguity and disputes
Step 3: Define Financial Terms Clearly
In lease agreement:
- Deposit amount and conditions (typically 2 months rent)
- Rent payment date (usually 1st of month)
- Late payment penalty (₹500-1,000 per day after 5-day grace)
- Utility costs responsibility (who pays water, electricity)
- Maintenance cost split (example: tenant pays <₹5K, landlord pays >₹5K)
- Notice period for vacating (typically 30 days)
Pro tip: Clear financial terms prevent disputes over money
Advanced Tenant Screening: 5-Step Process
Step 1: Application Screening (Phone/Email)
Must-have information:
- Full name and ID proof (Aadhar, PAN, Passport)
- Current employment (company, designation, salary)
- Current address and how long living there
- Reason for moving
- Occupants (how many, family members, guests)
- Pet information
- Preferred move-in date
Red flags at application stage:
- Vague about employment or income
- Changing stories about reason for moving
- Unwilling to provide ID proof
- Pressure to move in immediately (“need by tomorrow”)
- Too-good-to-be-true story (e.g., “always pay in advance”)
Step 2: Employment Verification
Verify employment is REAL:
- Call company HR department directly (not number given by tenant)
- Confirm job title and salary range
- How long employed (minimum 6 months recommended)
- Stability (in same role or recently promoted?)
Red flags:
- HR says “cannot confirm salary” (big risk)
- Vague about job responsibilities
- Recently joined (<3 months, higher default risk)
- Frequent job changes (every 6-12 months)
Minimum criteria: Salary ≥ 3x monthly rent
- Rent ₹22K → Minimum salary ₹66K/month
Step 3: Financial Background Check
Credit/Payment History:
- Previous rent payment history (contact previous landlord)
- Any litigation or defaults
- Bank account stability (request 6 months bank statements)
What to verify:
- Are they paying rent consistently to previous landlord?
- Any court cases or legal disputes?
- Do they have stable income deposits?
Key questions for previous landlord:
- “Did tenant pay rent on time every month?”
- “Any property damage?”
- “Any disturbances or issues?”
- “Would you rent to them again?”
Red flags:
- Refuses to give previous landlord contact
- Previous landlord reports late payments (≥2 times)
- Frequent job changes showing in bank statements
- Significant gap in income deposits
Step 4: Personal Reference Checks
Verify 2-3 personal references:
- Family member (NOT spouse—need outside reference)
- Friend or colleague
- Former employer or superior
Key question: “How do you know this person and what’s your relationship?”
What to assess:
- Are they legitimate references or fake?
- Do they speak positively or with hesitation?
- Do they know the person’s financial responsibility?
Red flags:
- All references are family members
- References unfamiliar with person’s financial history
- References can’t be reached or reluctant to speak
Step 5: Site Visit and Personal Assessment
Tenant should visit property with you:
- Observe how they treat the space
- Do they ask smart questions or unreasonable questions?
- Do they seem organized or chaotic?
- Are they respectful to you and your property?
Assessment checklist:
- Did they read the lease or just skim it?
- Do they ask clarifying questions about maintenance?
- Do they seem to understand their responsibilities?
- Overall trust level?
Pro tip: Trust your gut. If something feels off, it probably is.
Tenant Screening Scorecard (Quantify the Decision)
| Factor | Weight | Score | Result |
|---|---|---|---|
| Employment Verification | 25% | ? | ? |
| Salary Verification (≥3x rent) | 20% | ? | ? |
| Payment History (previous landlord) | 20% | ? | ? |
| References Quality | 15% | ? | ? |
| Personal Assessment | 15% | ? | ? |
| Personal Assessment | 5% | ? | ? |
| TOTAL SCORE | 100% |
Scoring:
- 90-100: Excellent tenant, approve immediately
- 80-90: Good tenant, approve with conditions
- 70-80: Acceptable tenant, get 3-month deposit
- 60-70: Risky tenant, consider alternative
- <60: Reject
Pro tip: Use quantified scoring to remove emotion from decision
Documentation: Protect Yourself Legally
Must-Have Documents
1. Registered Lease Agreement:
- 12-page standard format including all terms
- Must be registered (₹500-1,000 registration fee)
- Cost: ₹2,000-5,000 through lawyer
- Essential: Protects you legally in disputes
2. Inventory List:
- Detailed list of all furnishings (if furnished)
- Serial numbers for appliances
- Photos of condition before tenant
- Utility meter readings
- Essential: Prevents “that was already broken” disputes
3. Deposit Receipt:
- Document amount received
- Conditions for deposit return
- Date received
- Tenant signature
- Essential: Proof you received deposit
4. Meter Reading Record:
- Water meter reading at start
- Electricity meter reading at start
- Record of responsibility
- Essential: For utility billing disputes
5. Maintenance Log:
- Any issues reported by tenant
- Any repairs done by you
- Who paid for each repair
- Essential: Protects you from “you caused that damage” claims
Managing Maintenance: Who Pays For What?
Standard Maintenance Cost Split (Suggested Framework):
Landlord Pays (Major/Structural):
- Foundation damage
- Wall/structural cracks
- Roof leaks
- Plumbing issues (pipes in walls)
- Electrical issues (wiring, switchboard)
- AC (if provided by landlord)
- Water supply issues
- Sewage blockage (main line)
Tenant Pays (Minor/Usage):
- Light bulbs, fuses
- Tap repairs (faucet damage)
- Clogged drains (from user blocking)
- Broken furniture (if provided)
- Window glass (if broken)
- Door locks (if damaged by user)
- Paint touch-ups
- Monthly maintenance bills (water, electricity)
Shared (Determine in Lease):
- Painting (landlord typically pays 50% if needed for normal wear)
- Garden maintenance
- Common area cleaning
- General upkeep
Common Maintenance Issues in Pune (By Season)
Summer (April-May):
- AC problems (usage peaks)
- Water supply issues (demand peaks)
- Hot water system issues
- Pest control needs
Monsoon (June-September):
- Leaks (roof, walls, windows)
- Mold and moisture issues
- Drainage blockage
- Electrical issues from water damage
Winter (October-March):
- Less issue period
- Regular maintenance opportunity
- Paint peeling (from monsoon moisture)
Handling Problem Tenants: The Three-Level Approach
Level 1: The Friendly Conversation (First Offense)
Situation: Rent 3 days late for first time
Your approach:
- Informal call or message: “Hi, rent typically comes on 1st. Did I miss it?”
- Show it could be a genuine oversight
- Offer solution: “Let me know if there’s a delay. Can you pay by 3rd?”
- Document the conversation
Goal: Resolve without tension, give benefit of doubt
When to use: First-time minor issues
Level 2: Written Notice (Repeated Issues)
Situation: Rent late 2+ times in 6 months
Your approach:
- Send formal written notice (email with read receipt)
- State the facts: “Rent due 1st, received on 5th (month 1), 7th (month 3)”
- Reference lease terms: “Lease specifies penalty of ₹500/day after 5-day grace”
- Request response: “Please confirm receipt and confirm next payment date”
- Document everything
Sample notice template:
“Dear [Tenant Name], I am writing to address the late rent payment issue. As per our lease agreement, rent of ₹22,000 is due on 1st of each month with a 5-day grace period. Late rent in [months] was received on [dates]. As per clause 4.3, late payment penalty of ₹500/day applies. Please ensure timely payment going forward. Please confirm receipt of this notice.”
When to use: When pattern emerges (2+ late payments)
Level 3: Legal Action (Default)
Situation: Unpaid rent for 2+ months or persistent violations
Your options:
Option A: Serve Legal Notice
- Cost: ₹3,000-5,000 through lawyer
- Time: 15 days for tenant to respond
- If ignored: Move to eviction
- Success rate: 80%+ of tenants pay after legal notice
Option B: File for Eviction
- Cost: ₹10,000-20,000+ legal fees
- Time: 3-6 months (worst case 1+ year)
- Court must prove:
- Property possession by force
- Unlawful occupancy
- Non-payment of rent
- Note: Property remains locked during process, no rent income
Pro tip: 95% of default cases settle with payment after legal notice. Actual court eviction is rare but necessary threat.
De-Escalation Strategies: Save the Good Tenant
Situation: Good tenant with temporary financial hardship
Your approach:
- Have a conversation: “I noticed rent was late. Is everything okay?”
- Listen genuinely (not confrontational)
- Offer solutions:
- Payment plan: “Can you pay ₹11K now and ₹11K next week?”
- Temporary adjustment: “Can you defer ₹5K to next month if paid by 5th?”
- Extended notice: “Let me know if month is tight, plan accordingly”
Goal: Help good tenant through temporary crisis, retain them for 5 years
When to use: Established good tenant with usually perfect record
Situation: Bad tenant with excuses
Your approach:
- Stay professional, emotionless
- State facts: “Rent was due [date], received [date]”
- Enforce consequences: “Per lease, penalty applies: ₹500/day = ₹X”
- Set deadline: “Next rent due [date]. Late payment after [date] will trigger legal action.”
- Document everything
Goal: Establish that consequences are real, not negotiable
When to use: Pattern of excuses and non-payment
Maintenance Checklist (Quarterly)
Every Quarter, Inspect Property For:
Structural:
- New cracks in walls or ceiling (major concern)
- Water stains on walls/ceiling (leak indicator)
- Window/door frame condition (wood rot risk)
Plumbing:
- Water pressure (normal, low, fluctuating)
- Drainage (slow, backing up)
- Leaks under sinks
Electrical:
- Power outages or fluctuations (AC problem or wiring)
- Breaker trips frequently (overload)
- Outlets not working
AC/Cooling:
- Refrigerant leak (hissing sound)
- Water dripping outside (AC outlet)
- Reduced cooling (cleaning needed)
Paint/Flooring:
- Peeling paint (moisture cause)
- Tile cracks (foundation settling)
- Carpet/floor damage
Cost of quarterly inspection: ₹1,000-2,000 Benefit: Catch issues at ₹5-10K repair before they become ₹50K disaster
Property Management Software/Services in Pune
Software Options (DIY Management):
Option 1: Free (Spreadsheet)
- Cost: ₹0
- Tools: Google Sheets or Excel
- Effort: High (you track everything)
- Good for: Single property owners
Option 2: Property Management Apps
- Cost: ₹2,000-5,000/year
- Examples: Zillacodes, PropertyShark, PG Management Suite
- Features: Rent reminders, maintenance tracking, tenant communication
- Good for: 2-5 properties
Option 3: Full Property Management Company
- Cost: 5-8% of monthly rent (₹1,100-1,760 on ₹22K rent)
- Services: Tenant screening, collection, maintenance, accounting
- Hands-off: You receive rent, they handle everything
- Good for: Absentee landlords or those with multiple properties
Property Management Companies in Pune:
- LocalOyster (full PM services)
- PropertyShark (technology + PM)
- 99acres Property Management (large platform)
- Zillacodes (tech-enabled PM)
Related Articles for Landlords
[Read “Maximizing Rental Yield in Pune” for investment strategy] [Check “Short-Term vs Long-Term Rentals” for alternative models] [See “Furnished vs Unfurnished Rentals” for rental type strategy]
External Resources
Tenant Screening Tools: https://www.99acres.com/property-tenant-screening (Tenant background checks) Legal Templates: https://www.indianlawyer.com/documents/rental-lease (Lease templates) Property Management Companies: https://www.google.com/maps/search/property+management+pune (Local PM services)
Final Verdict: The Screening Process That Works
Good screening follows the 5-step process:
- Application screening (weed out obvious red flags)
- Employment verification (ensure stable income)
- Financial background (check payment history)
- Personal references (verify character)
- Site visit and assessment (trust your gut)
The result: 90%+ chance of getting a reliable tenant, which translates to ₹2-5L in prevented losses.
The single best decision: Spend 4-5 hours screening upfront to save ₹2,24,000 in
