Make your post-retirement rental income work for you

Property disputes and poor documentation can turn rental income into a liability for seniors

- Aprajita Sharma

Many people who have retired or achieved financial independence early earn income from renting out real estate. However, relying primarily on rental income isn't wise, especially for senior citizens. What if your property remains vacant for a few months, or a tenant occupies it by force?

Allahabad resident Anindita Basu's relative had such an experience. "The tenant had been living in her apartment for many years. When she told him to vacate because she wanted to move there, he refused to do so. It took her four years to evict him with a court order," Basu said.

Basu's own retirement is five years away. She has a property in Bengaluru that she plans to rent out once she retires. "Since I won't be living in Bengaluru I am worried about managing my property and giving it to tenants. I have decided I'll hire a property manager like Nestaway who'll take a certain cut from my rental income and manage my property on my behalf."

Kamal Kishore Mundhada (67) from Noida said he simply avoids giving his apartment to local residents. "I prefer those in the salaried class who have come to Noida for work. They tend to be better tenants than local residents, who might use their power to threaten owners. I cannot risk it at this age."

What worries him, though, is the low rental yield—just 3.5% for his 2BHK+store property. "Sooner or later I'll sell my apartment to put the lump sum in FDs to get interest income. I also get some pension, and have invested in RBI bonds, SCSS (Senior Citizen Savings Scheme) and PMVVY (Pradhan Mantri Vaya Vandana Yojana)," he said.