How to get higher rent from your house4 min read . Updated: 27 Jul 2020, 09:33 PM IST
Tailoring the facilities in the house and your requirements as a propertyowner to a pandemic-stricken world can help you get more
With companies switching to work-from-home (WFH) and educational institutions to online classes after the lockdown due to covid-19 pandemic, many salaried individuals and students gave up their rented houses and went back home to stay with their families. As a result, the rental market nosedived, but things have started improving. “Between March and May, there were very few transactions. Since June, however, the traffic of people who want to rent a house has picked up. In July, the demand for rental housing is 80-90% of pre-covid-19 levels," said Saurabh Garg, co-founder and chief business officer, NoBroker.in, an online real estate platform.
However, property owners who have faced salary cuts or job losses and are banking on rent for cash flows may still have a tough road ahead. “Rent could be 5-10% lower going forward compared to February levels," said Mani Rangarajan, group chief operating officer, Housing.com, Makaan.com and Proptiger.com. We tell you what you can do to get more rent.
Provide more facilities
Providing a few extra facilities could get you better rent.
Ensure the house is clean and hygienic. “With sanitation and hygiene becoming more pertinent (in view of covid-19), landlords may ensure that these measures are in place," said Anuj Puri, chairman, ANAROCK Property Consultants Pvt. Ltd. Fumigation and other measures could help.
Look at making the house more conducive to WFH by adding extra facilities like a working desk and internet back-up.
change with the times
Charge lower deposit: One way to get higher rent is by charging lower deposit. In cities like Mumbai and Chennai, the deposit rates are up to six months of the monthly rent. However, if you temper your expectations and are flexible at a time when several people are facing a cash crunch, you may find more takers.
“Two months of deposit should be sufficient for owners," said Rangarajan.
Shoot a video of your property: Adapt to social distancing norms and newer technology. “We have seen that tenants are now demanding video walk-throughs. They are shortlisting properties based on the videos. After selecting a few that they like, they pay a visit to finalize them," said Garg.
Know the demand: WFH requirements have changed the demand slightly. “During the lockdown, many realized that a smaller house is not conducive to WFH, especially where both spouses are working. Many, therefore, want to shift to a bigger house," said Garg.
A lot of WFH individuals are fine with moving to the suburbs, provided they get a bigger house. If you own a bigger house in the suburbs, you could still hold on to the rent.
keep multiple tenants
Students who earlier stayed at paying guest accommodations will now be looking to rent a house to maintain social distancing. But due to budget constraints, they may like keeping a room to themselves instead of renting out the entire house.
“Some college courses have practical classes, which may not be possible to conduct on video. We expect colleges to open up for practical sessions and students to be back," said Rangarajan.
Having multiple tenants means having multiple sources of rent. If you were charging, say, ₹30,000 from a family earlier, you could charge ₹17,000-18,000 each from two tenants, thereby managing your rental expectation.
However, when you rent out a house to bachelors or students, you should be ready for a high “turnover". This is one of the reasons why students are charged higher rent. Unlike families, , who usually stay for the entire tenure of the rental agreement, bachelors and students could leave any time, drying up rent from one or more rooms. But there could be higher number of referrals for tenants in this case.
While you may get higher rent, you may also need to spend on furnishing. Investments on interiors, furniture and so on help make the property more attractive for tenants, who may then be willing to shell out more rent.
“Usually, the rental difference between semi-furnished and fully furnished houses can be 10-20%," said Puri.
rent to co-living firms
If you have an independent property, you can let it out to a company that facilitates co-living. Such firms take an entire property on a long lease. They manage the property and find the tenants.
“Different startups have different business models. Some may offer a fixed monthly income while others may opt for a revenue-sharing model. Owners should consider this before partnering with any co-living startup," said Puri.
Co-living service providers either look for independent houses, or lease out multiple apartments directly from developers.
If nothing works for you, the best option is to let out at whatever rent you are getting right now. It would be better than getting no rent at all. At the time of renewal of the agreement, you can negotiate a higher rent if the market bounces back.