| | | | | The sharp rise in rent hitting the employees to a |
| The rate at which the property prices, especially for | | | | great extent. They are now forced to buy properties |
| the first or second sales are increasing, it can be | | | | to evade the high rent. This is going to affect the |
| compared only with the scorecards of new obsession | | | | corporate sector housing where the rent per month |
| of 20-20 cricket matches. Now it seems that the | | | | is over Rs. 50,000. |
| owners of flats wish to have the same level of | | | | |
| escalation while putting their property on rent. | | | | A little more responsible decisions are expected from |
| | | | | the Mumbai apartment owners as well. If they keep |
| It is almost a perpetual battle between the licensor | | | | on increasing the rent, at some point, it will reach |
| and licensee in Mumbai. Without any set parameters | | | | some unrealistic figure, and they will have to leave |
| or indicators for rents, the situation gets worse | | | | their property vacant. The rent should be affordable |
| everyday. | | | | and make some sense to the tenant when they |
| | | | | would consider staying in a rented accommodation |
| Most of the Mumbai residents receive a fixed amount | | | | rather than buying a flat. |
| as HRA or Housing Rent Allowance that ideally should | | | | |
| cover their rents. | | | | As every person who can afford is having a spare |
| | | | | apartment in Mumbai and many new high-rises are |
| Companies fix this rate on the basis of various | | | | coming up, the income from the lease is quite |
| economic reports and feedback from real estate | | | | lucrative. This should guide the owners to take a |
| developers. The amount is decided after considering | | | | long-term view. They should also consider the capital |
| several factors and it gets revised every year by 5 | | | | appreciation they have already received on their |
| to 10%. | | | | property rather than just to look at the returns they |
| | | | | are going to get from the rent, which may be lower |
| But, as there is a sharp rise in capital value for real | | | | than expected. |
| estate, owners now expecting higher rents, and the | | | | |
| companies are finding it difficult to increase the HRA | | | | The return the owners can expect from rent should |
| by the same degree to cover the situation. | | | | be around 3 to 6%. This is largely influenced by type |
| | | | | of the property, its location, and condition. Although |
| In this situation, if an owner holding a company lease | | | | the capital values on India real estate soared up by |
| with the organization asks to increase the rent, the | | | | almost 200% over last three years, to take a more |
| company will either terminate the lease or would like | | | | realistic view, 35% should be deducted from the |
| to decrease the rent. With sinking stock market and | | | | current property value for getting the figure around |
| soaring international oil prices, they are more | | | | 3 to 6%. |
| calculative than ever. Now, if the rent component | | | | |
| starts growing at this rate, they would definitely take | | | | This can only assure the owner that they are getting |
| a reverse mode, as they are the largest licensees in | | | | a reasonable return from their property as rent. It is |
| the city. | | | | unrealistic to expect Rs. 50,00 rent monthly from a |
| | | | | property of Rs. 50 lakh. In locations like CBDs and |
| Quite a few companies and foreign banks are asking | | | | around one can expect the highest rent since it is |
| their employees to get into individual lease agreement | | | | located conveniently near workplaces. |
| with their landlords, as the process of maintaining | | | | |
| several company lease procedures are getting | | | | You lose almost 8% of your yearly rent every |
| difficult for them to handle. They are also asking the | | | | month you keep your apartment vacant. With a |
| employees to find out the accommodation, as it is | | | | good India property dealer and a better negotiation |
| hard for them to agree to the terms placed by the | | | | with the prospective tenant should result in some |
| owners. It is now easy to find a flat on lease | | | | workable agreement between both the parties. |
| because of secured laws in favor of the owners for | | | | Getting a good tenant is your prime objective to see |
| leasing. | | | | to it that your property is on rent for 95%. |
| | | | | |