Mumbai: Several people moving to Mumbai and looking for a rented accommodation have a run-in with property brokers. Amir Rizvi had a harrowing experience finding a rented house in suburban Mumbai, and in 2009 decided to start an online service that would eliminate the middleman and directly link an apartment owner to a potential tenant.
“Most often the brokers do not give services that match the brokerage and we feel extorted,” Rizvi said. Besides, it’s in the broker’s interest to push up the rent as his commission is linked to it.
Rizvi initially launched his service on Google Inc.’s social media Orkut but that failed to attract attention. So when Facebook started getting popular, he launched a group on it called “Flats Without Brokers” that became an instant hit. It had around 2,000 members by the end of 2010.
But the restrictions Facebook imposed on groups following the Jasmine revolution in Tunisia in 2010-2011, fanned in part by social networking websites, hit Rizvi’s operations.
By then Rizvi, with the help of his friend Saleem Husain, a director at Citigroup (international capital markets), started a website named flatswithoutbroker.com. Husain had immediately agreed to Rizvi’s suggestion to start the website as he too had faced trouble with brokers while searching for a flat in Mumbai, though his company had shortlisted apartments for him. Husain is the sole sponsor and so far has invested Rs.7 lakh on the website.
A user can log on to the website using Google, Facebook or Twitter and post or respond to comments on the availability of rented accommodation in cities across India. The website and the earlier Facebook group together have about 40,000 members, and are adding about 300 members every month. A typical user spends about five minutes on the website or the group page on each visit, said Rizvi.
Some of the oldest members have volunteered to become administrators for the Facebook group and now there are five such people who accept new members and monitor the posts.
Rizvi, 43, says most of the demand for rented accommodation comes from Mumbai followed by the National Capital Region that includes New Delhi.
In Mumbai alone, three-four people find accommodation in a day through the website or the Facebook page, said Rizvi. Together, the service helps people save about $2,000 a day, he estimates.
With property purchases slowing because of the economic slowdown and rising prices, more people prefer to rent rather than buy apartments. According to property website Makaan.com’s Buy vs Rent Index released in June, key cities including Mumbai, Delhi, Bangalore, Ahmedabad, Pune and Chennai saw a significant shift in sentiment in favour of renting.
Rizvi, however, says his website has limitations in terms of filtering members and posts. Many a time brokers create fake accounts to lure other members. “Whenever we find such instance we expose them and cancel the membership. Also, we do not allow racist (comments) or anything that violates the fundamental rights,” Rizvi said.
The website needs to be spruced up to provide a better user experience, he said. “But we don’t have enough budget immediately to do this.”
Rizvi is a freelancer who helps prepare advertisements, writes Hindi scripts for television channels, and works as a graphic designer for various print media.
He spends two hours a day for his Facebook group’s work and plans to set up a team dedicated to providing more information to home seekers. “My long-term plan is to convert the website to a city guide with ratings for various services offered by each city,” Rizvi said.
For several tenants who don’t enlist a property broker, a big challenge lies in getting ‘leave and licensing’ agreements registered at the sub registrar’s office or at dedicated local offices. They often opt to engage middlemen at these offices who charge Rs.1,200-2,000 to get the documents registered.
“This again defeats the purpose of doing away with middlemen. As the government is yet to implement the electronic registration of leave and licence agreement, we are planning to have a dedicated lawyer-cum-website administrator to help people with the registration,” he said.
In 2011-12, more than 100,000 ‘leave and licence’ agreements were registered in Mumbai alone, up from 97,600 in 2010-11, official data show.
Another major hurdle potential tenants face while searching for a rented accommodation is the housing associations. “Every newcomer in the city is treated like aliens. The condition is worse if you are a single girl or from a minority community,” Rizvi said.
Rizvi ruled out any tie-up with other property websites because of the fees they charge. He is also apprehensive of using Google AdSense to bring in advertising revenue fearing the sponsored links could be from brokers and that would confuse members. At present, he does not intend to earn revenues from this initiative.
Mint has a strategic partnership with Digital Empowerment Foundation, which hosts the Manthan awards.