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The Rent Realty of Mumbai

Friday, March 17, 2017

A recent property report by a research agency stated that even people with handsome salaries are finding it difficult to purchase a house of their choice in prime locations in Mumbai, making renting the preferred option. Suraj Uchil gets expert and common man view

If you are a resident of Mumbai, you would know that living in a house where the name plate reads your initials is a dream for everyone. Owning a house in the maximum city is on everybody’s bucket list. People spend years toiling and working to save up the money to buy their perfect home in the city. But, in recent years, this dream has started to remain one for many people in the middle class segment, especially due to the steep rise in the property prices. A recent property report by an research agency stated that people earning as much as Rs20-25 lakh per annum are finding it difficult to purchase a house of their choice in prime locations in Mumbai. As such, people are finding renting as a suitable option for themselves.

Renting a property serves as a great alternative to buying a flat. Buying a flat also brings a lot of other responsibilities that one does not necessarily have while renting. For working professionals, renting a flat is often a convenient option. Sancheth Suvarna, a live sound engineer from Powai explains, “For me, affordability becomes the main question while deciding whether to buy a flat or to rent one. For any good property in Mumbai, the EMI will not be less than Rs 30,000-40,000 per month. Plus, the maintenance cost that comes up due to the various amenities provided by the builders also becomes an added expense. In the case of renting, the monthly rent would definitely be very less when compared to the EMIs.”

No compromise on lifestyle
Another major reason why people are shifting to the renting culture is their lifestyle. Many of them don’t want to give up on their lifestyle or even compromise it in order to get a property. When one goes to buy a loan for a property, a lot of thought goes along with it. Taking a loan for twenty years can have glaring effects on one’s lifestyle. To get your dream house, one has to give up on a lot of things. For them, renting becomes an hassle-free solution as they get a good property of their choice with all the amenities they require, and also the monthly rent is also not so much as to make them compromise on their style of living. “When I sat down to calculate how much I would have to shell out every month in case of a loan as compared to renting out a flat, I realised that monthly installments would be almost 75% more than my monthly rent. As I didn’t want my lifestyle to get hampered in anyway, I opted out for renting than to sit with the additional burden of the loan for the next twenty years or so”, explains Vipul Rungta, an IT professional from Navi Mumbai.  

Rise in price
The whole renting phenomenon isn’t new to the real estate market. This trend has been going on for quite some time now. As Sandeep Sadh, CEO of Mumbai Property Exchange Pvt. Ltd, explains, “The rise in the leasemarket has been going on for quite some years now. Earlier, buying a property was the most important thing to do for any individual working in the city. But, with the steep rise in the property rates, especially in the city areas, customers have now branched out and are looking at renting as the better alternative. Another reason for this trend is the miscalculation on both the builders and the buyers’ part.
The builder puts up a price on a property and offers maybe a 10% discount on it. But, the buyer might have an eye for the same property but with a wish of getting close to 20-25% discount due to his budget constraints or any other circumstance. This difference is what leads to the flat being unsold and the customer preferring to stay on rent rather than buying a property.”

The phenomena of renting is in such force that people in many parts of the city prefer to put up their flats on rent and themselves move into a cheaper rented apartment. “I know a couple of my friends who have put up their flats in Andheri on rent and are staying in a rented apartment in Bandra. The rent difference also works as their savings. Another friend had bought a flat in Chembur, but has put it up for rent as well as the returns are pretty good,” reveals Vipul.
Choosing whether to rent or to buy a house can be a tough call. One must weigh in all the pro and cons, and then come to a conclusion in this matter.

The rise in the lease market has been going on for quite some years now. Earlier, buying a property was the most important thing to do for any individual working in the city. But, with the steep rise in the property rates, especially in the city areas, customers have now branched out and are looking at renting as the better alternative. Another reason for this trend is the miscalculation on both the builders and the buyers’ part. The builder puts up a price on a property and offers maybe a 10% discount on it. But, the buyer might have an eye for the same property but with a wish of getting close to 20-25% discount due to his budget constraints or any other circumstance. This difference is what leads to the flat being unsold and the customer preferring to stay on rent rather than buying a property.

— Sandeep Sadh,
CEO of Mumbai Property Exchange Pvt. Ltd

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