The rental market in India is gradually evolving, owing to a change in the mindset of people. Renting a house, is no longer merely driven by affordability, as compared to buying a home. Rather, people are now choosing the rental option, to be able to live in a preferred locality and also to avail of amenities that promise a good lifestyle. This changing trend, presents an opportunity for organised players and rental management companies (RMCs) to step in.
Vinayak Katkar, director and co-founder of Amura Marketing Technologies, points out that in India, traditionally, the rental market was driven by local brokers because the supply/accessibility to inventory was limited to brokers. “With various property portals available now, this inventory availability issue has been sorted. Nevertheless, brokers are still managing rental homes. What young people want, is not just a home but managed property services that take care of their daily needs and chores. Start-ups like Nestaway and Grabhouse, are managing properties and finding tenants for landlords. This has certainly helped people to find good places to live and has also boosted the rental yields for property owners,” Katkar explains.
How rental management companies (RMCs) can help property seekers
Communication and transportation, have also had a major impact on the rental market, says Kiran N, co-founder, RentMyStay.
“People are travelling, for pleasure or work, more frequently than before. For short stays, people earlier used to rely on hotels or serviced apartments, which can be very expensive. For example, if someone wants an accommodation for two months, hotels can be very expensive and flats have minimum lock-in period of six months. Consequently, a person may be forced to pay for six months, even if he stays for only two months. In such scenarios, a short-term rental plan, which allows customers to book a furnished flat for one day to six months, can be ideal. People can save a lot, by choosing such flats, instead of hotels and cooking for themselves instead of ordering food from hotels. Such needs, have created big opportunities for RMCs in India,” says Kiran, adding that tenants now prefer services that are transparent and customer-oriented, rather than the existing systems.
RMCs’ professional services to benefit developers
Kawal Nagpal, managing partner at Hi-tech Constructions, maintains that RMCs can also be very useful, in case of builder flats, till the time the ownership is not completely transferred. “They provide professional services, like security guards, maintenance of flats or the complete society, like operating the lifts and also take charge of electricity supply, horticulture requirements, etc. This happens especially in commercial properties. In this way, RMCs can help to generate good rentals and at the same time, it does not require a lot of time from the builder,” Nagpal elaborates.
As the rental market grows, owing to the slowdown in real estate construction and high real estate prices, organised RMCs are bound to tap the opportunity. In the beginning, RMCs will be seen setting up their bases in the metro cities because this is where the real action is – in the form of jobs, as well as crunch of space to live. Moreover, these factors will also force people to search for a hassle-free accommodation that offers additional benefits. From a property owner’s perspective, however, before giving house on rent, it is important to ensure that the disadvantage of renting are outweighed by the benefits.