Almost two years ago, Suneel Padale, 36, a development professional, moved to Delhi from Bharuch, Gujarat, on an assignment. Initially, he stayed with friends and acted quickly on their suggestion to look for a house in Mayur Vihar Phase-I. He visited the area and liked it. With friends and newspapers disgorging details of property agents in the area, the house search started.
He was, however, disappointed with the results as most of the apartments he checked did not live up to his needs. He stuck with the location in spite of that. Finally, he moved into an apartment that he liked—but it turned out to be a sour deal. As Padale says, “The landlord wanted to sell his house and in the intervening period he wanted to get some rent.” For Padale, the search began again.
Suneel Padale, 36, Development professional, Delhi
This time, however, he changed his strategy. During his stay he had made some new friends, particularly, older residents of the area. He took references of property agents from them. “These agents had a larger supply of flats as compared to the earlier ones,” says Padale. Still, it was two months before he found a flat. He summed it up wryly: “The experience is quite painful and time-consuming.”
Painful, indeed, is the process, especially if you are searching for a house in the April-June period as a lot of job openings are created then. Also, campus placements of most business schools usually end around that period. “This adds to the demand for rental properties; primarily, this demand is created in the Rs5,000-15,000 bracket,” says Prashan Agarwal, business head, www.allcheckdeals.com , India’s first online brokerage for residential real estate.
It is now established that the sale of ready-to-move-in properties has taken a beating. The main reason is the high cost of real estate, with credit becoming costly. As an outcome, many people are effectively postponing buying their dream home. This has driven up the demand for properties on rent. “In the last 6-12 months, rentals have risen, on an average by 15-20%,” says Agarwal.
For rents to stabilize or fall, volume of property purchase transactions needs to move up. With that not happening, at least in the short term, rentals will continue to move up. Against this backdrop, if you are rent-bent, you need to look at a few things.
The first step is to zero in on the locality. Then find out the regularity of water and electricity supply. Check the distance to your office, local markets and other amenities, such as schools and hospitals.
Also, go through the property portals to get an idea of the fair rent for that locality.
Get in touch with property agents. You could also sound out your office colleagues, in case they are planning to rent out their property, or know someone who is willing to do so. This makes sense as by getting rid of the agent you save on brokers’ fee, which is typically a month’s rent.
If you are not that lucky, start shortlisting agents. If you know people in the area, take references or check the classifieds. Big property agents usually publish many advertisements for different properties. You can also visit the property portals. Zero in on the agents who have the largest supply. Once you have identified the broker, visit the office and check if he has a permanent address or not. “A service tax registration indicates the broker takes his business seriously,” says Naresh Malkani, CEO, www.indiaproperties.com. Ask if he is a member of any local or national real estate association. “At the end of the day, you should use your own judgement,” says Padale.
Once you have identified the property, the agent arranges a meeting with the landlord. There are a few things that you should clarify. Ask why the property was vacant. “Ask him what plans he has to move into the property or to sell it,” says Agarwal.
In Delhi NCR, a landlord would generally ask for two months’ rent as security deposit (SD) and a month’s rent in advance. The amount of SD varies. In Mumbai and Bangalore, you have to pay up to 10 months’ rent as SD.
“One should always take the meter reading of all utility services during the pre-possession walk-through. The readings should be attached as an addendum to the lease and signed by both the parties,” says Malkani. Insist the landlord must get the electricity connections checked before he hands over the house. Ensure that the wiring is earthed properly and everything else is where it should be. If any doors or windows are warped, get them rectified. Check if the locks in the house are in working condition. If you find a faulty one, get it changed. Finally, ask the landlord for pest control and to whitewashing of the house.
These are of two types—company and personal. Most landlords are comfortable with a company lease. “A company lease protects the landlord from any potential tenancy hold over provisions,” says Malkani. But if you are unable to furnish a company lease, there is the personal lease option. “Convince the landlord that you are a person of integrity,” says Agarwal.
Whichever option you choose, certain things have to be stated clearly, especially the duration of lease and the SD. If it’s a personal lease for 11 months, get it notified. If it’s a company lease for more than a year, however, get it registered with the help of a lawyer. “The lease then becomes a legal document that secures your rights as a lessee,” says Agarwal. At the end, pressure the agent to complete all the documentation before you actually move into the property.
HAPPY HOUSE-HUNTING D-I-Y
Locality. Select the locality; look for proximity to markets, hospitals, schools and your office, and connectivity
Rent.Look at property portals and find out the reasonable rent of that area
Reference.Get references of property agents from people in the locality, or refer to newspapers and property portals
Dealer. Check the agent’s office; look at the size of his set-up; ask for references of past clients; a service tax registration means he takes his business seriously
Details.Shortlist the property agents; tell them about the size of property and the rent that you want to pay; check the security deposit and brokerage fees. Ask the agent to shortlist properties for you a day before you visit the area
Property.Check the condition of the property. Make sure it has not been vacant for long
Utilities. Check the water and electricity supply; ensure that there is no leakage, and that all electricity connections work
Interiors. Check for warped doors and windows, or broken panes; insist on a whitewash and pest control
Lease. The terms and conditions should bementioned clearly in the agreement; get it notified/registered; Complete all paperwork before you move in
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