Wednesday, November 28, 2018

What are the landlord’s rights and what precautions a landlord shall take before renting out a property?

Author: Sachin Gupta | Find me on Twitter

Real estate is a lucrative investment class. Not only it gives you capital appreciation gains but at the same time one can earn rental income from his/her property. Whether the property you own is commercial or residential, one can rent the property to earn stable monthly income. However, as easy as it may sound, there are always issues when it comes to renting out a property. What if the tenant does not pay the rent on time? What if the tenant mishandles the property? What if the tenant doesn't pay the utility bills on time? These are some of the questions a property owner is confronted with and therefore taking precautions at the beginning of renting out a property will make sure that the property is rented out to good quality tenant.

At the same time, a landlord enjoys legal rights as laid down by the Transfer of Property Act, 1882. These are ‘Right to timely accrual of lease amount’, ‘Right to know about the condition his property is in’, ‘Right to know of any changes that the tenant might want to make’, ‘Right to notify the tenant of an intention to increase the rent’, ‘Right to be informed of any disclosures’, ‘Right to get back his property on repossession’, ‘Right to repossess the property complete with all fittings and furnishings’, ‘Right to claim all the charges for supplies’.

Therefore, before one rents out or leases his/her property to a prospective tenant, make sure to go through the following document about ‘Precautions before renting out’ and ‘landlord's rights’.




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Wednesday, November 21, 2018

Why You Don’t Need to Leave Your Home to Find a New One

House hunting isn’t for the faint of heart.


No matter how structured your city is or well paying your job might be, you might still be short of a decent place to live in. A house hunt takes seemingly countless hours of neighborhood tours and location drive-by to finalize that decision on ideal property. If your weekdays are packed, chances are that you would also have to compromise on your weekends to go property hunting with your broker.

As if putting up with your broker isn’t enough, these incessant trips to different localities will also leave you physically and financially drained. Opting for an online realty search, you get to check out countless listings, be it rental or lease apartments, without even having to step out of your home.

Image: Pixabay


Here’s how taking your house hunt online can take a load off your shoulders.


  • Saves Time and Energy 

Visiting each flat for rent personally would take up a lot of your time and energy. Additionally, you’d have to cough up parking and fuel charges if you plan on taking your own vehicle to new localities. Getting stuck in traffic for hours can also leave you frustrated.

When you search for properties online, you save yourself from all these unnecessary hassles. You can simply surf through numerous sites that give you a virtual tour of the property. You can make a list of a couple of properties that you want to check out personally, and pre-book a visit before you zero in on a particular piece of property.

  • Eases The Documentation Process

Unlike conventional processes where the broker would be in charge of the situation while you were in the dark, you would take the lead here. You’d be aware of the proper pricing and wouldn’t be taken advantage of. Some of the real estate sites even help you understand the documentation process.

  • No Brokerage Fee

When you opt to search for flats without brokers online, you directly interact with the owner and avoid having to go through any intermediate. This helps you in getting to know the owner and learning more about the property first-hand. You also free yourself from paying a brokerage fee and all that unnecessary running around.

  • Refines Your Search

One of the best parts of searching for a property online is not having to go through hundreds of random properties to get what you want. Filtering your search according to the locality, specification, amenities, or the budget you are going for will help you streamline your search.

You can get your hands on the best deals when you compare different properties and their rates online. Doing your homework on the current real estate scenario across different neighbourhoods also helps you build confidence in your ultimate decision.  

  • 24/7 Availability

Round-the-clock realty portals let you access different properties throughout the day. With just a PC and phone at hand, you can check out properties online without the even needing to get out of bed. You can get all the contacts and listings you need within the comforts of your home.

This means that you don’t have to compromise on your leisure time. Using this method, you can shortlist a few prospects before you shift into a new home in a different city.

You can now find the home of your dreams without giving up on daily activity. Comment below to let us know how online realty portals have helped you find the right place, and/or if you have a better suggestion!


This is a guest post by Sudarshan Purohit

Wednesday, November 14, 2018

Cyclical nature of commercial real estate

Author: Sachin Gupta | Find me on Twitter

This post deals with commercial real estate in India. For the last 2 years, one would have noticed that most real estate developers and private equity funds have focused their energies on development of residential real estate across India.

Why did this happen? Why did real estate developers in last 2 years solely focus on residential real estate? Well, the answer lies in global economic slowdown. Due to global economic slowdown, companies started to lay off employees and there was freeze on investment in new projects. And all of this resulted in lack of demand for commercial office space by companies. Due to lack of demand of office space, developers ignored the commercial real estate and that has resulted in tight supply of office space.

And now that, economy is starting to show signs of recovery, there is again demand for office space and therefore it is pushing up the prices of commercial real estate. So, the situation now is – demand is increasing but supply is tight. And in this condition, rentals are bound to go up.

Why does this happen? Why do we sometimes see oversupply of commercial real estate and sometimes tight supply? It is because of the cyclical nature of the real estate industry. Some underlying facts regarding the commercial real estate are:

  1. It is a very large market and it is highly competitive
  2. Ownership of commercial real estate is highly fragmented across the country


Why does commercial real estate development follow a cyclical pattern? During the boom time, when local real estate developers and investors sense that vacancy rates are declining and rents are rising, they believe more development may be feasible. Consequently, developers begin to analyze markets to determine if additional space, if developed, can be leased profitably. Because many competing developers may sense this opportunity simultaneously, they may all begin to develop at once in order to satisfy the demand. Even though there may be a definite need for additional space, the potential for over-development will exist as each developer rushes to deliver additional space to the market before competitors. There is no way to determine exactly how much space should be developed because the depth and extent of demand are difficult to predict. As a result, commercial real estate is sometimes said to be prone to periodic cycles of over-development.

One would have seen during the 2004-2008 boom time in India, when plethora of shopping malls came up in Mumbai, Delhi NCR, Bangalore, Chennai, and other economic centers in India. Because there was demand for retail space, developers jumped up and created an oversupply of malls across India. The important point to notice is that it is very difficult to predict the exact demand and therefore oversupply will happen in commercial real estate.

On the other hand, when economy is going down and growth is shrinking, developers may ignore the development of commercial real estate because of lack of demand from companies. However, as soon as, economy picks up, the tight supply of commercial real estate again pushes up the rentals and vacancy rates starts to fall.

And the cycle continues like this. There will be periods of oversupply and there will be periods of tight supply.



Let’s analyze this diagram above.

  1. When economy is in recovery phase, the demand for commercial real estate increases which reduces the vacancy rates and rentals go up. 
  2. Seeing the fall in vacancy rates and improving rentals, developers start developing the additional space. Rentals start to cool off because there is supply of additional space. 
  3. However, because it is difficult to predict the actual demand, the oversupply of space is seen in the market. Rentals fall.
  4. Increasing vacancy rates and falling rentals drive away the developers from developing the commercial real estate and supply is tightened.

One full cycle takes 5-6 years and all the 4 steps mentioned above repeat themselves.


With this in mind, can you time the market as far as investment is concerned??





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Tuesday, November 6, 2018

Growth of Housing Finance in India

Author: Sachin Gupta | Find me on Twitter

In order to provide housing for all by 2022, the government needs to develop the housing finance sector. In its current avatar, the housing finance sector is able to provide loans to borrowers working in the formal sector with proof of income and banking transactions. However, about 99% of the total shortage of housing in urban areas belongs to the Economic Weaker Section and Low Income Groups of the society.  (Overall housing shortage in urban areas - 18.78 million units till 2012).

Over a period of time, housing finance has evolved considerably. In the initial days, people either self funded their housing needs or participated in schemes launched by government owned institutions in the real estate sector like state housing boards and development authorities. Launch of HUDCO in 1970 represented a paradigm shift and for the first time housing finance was formalized. However, private sector participation in housing finance took shape only when HDFC was setup in 1977. In the late 1990s, commercial banks also got involved in housing finance.

On August 28, 2014, Prime minister launched the ‘Pradhan Mantri Jan Dhan Yojna’. The objective of the program is financial inclusion for all. Can this program cater to the housing finance needs of the BPL or marginalized Population in future? There is possibility of directly transferring interest subsidies on housing loans to the EWS and LIG categories.

In this section, we highlight the various steps taken by the successive governments to facilitate the need for housing and housing finance in India.






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