Vacant Houses: One of the Prime Reasons for Mumbai’s Unaffordable Real Estate Rentals

As per our research and analysis of data provided by few government agencies, there are around 25 Lac houses vacant in Mumbai city alone. It is alarming that Mumbai, the city of slums and homeless, has such a high level of unused flats. In this figure, there is also a very small percentage of flats which are unused because builders couldn’t sell them at their desired price.

We, at RealEstateDealStreet.com, researched on this and found out few reasons for high real estate prices and few solutions as well.

Black Money:- One of the foremost reason for this mess or madness is that almost all the corrupt politicians, business men and bureaucrats from whichever part of the country, have parked their money in Mumbai’s real estate market. This could be either because they think they can invest big amount of unaccounted money in one single transaction, and/or it may seem to them as a good opportunity in a lucrative and crowded market. These types of people generally don’t let out their properties for confidentiality reasons.

Manipulative Rules by Housing Societies: - Almost all the housing societies have their own set of rules. Society’s office bearers manipulate law to benefit their own selfish interest that discourages prospective owner’s to rent out their property.

High Transaction Charges: - Mumbai has highest transaction charges while renting out  property in India, if not the world. The owner has to pay good amount of money to the society, govt. agencies and high broker commission.

Properties under Litigation: - In Mumbai lot of properties are under litigation, either because the property was pledged to banks for loan and the owner couldn’t pay banks due, or because of a family dispute between legal heirs, or dispute between two or more than two parties owning the property.

Loopholes in Law: - Tenants misused Indian legal systems in their favor , the repercussions of which lead to property owners being wary of renting their apartment. 

Lack of Property Management Services:- The Indian real estate market doesn’t provide property management services to two or less than two property owners.

These owners don’t know how to market their property and rent out. NRI’s are most affected by this.

Inflexible Markets:- Mumbai has the most inflexible real estate market in the world. Here, once the builder has sold the apartment, he will never think about that particular building or locality again. The same applies to the local development authority. They are not flexible enough to take changing market dynamics into account and change as per the market. Cuffe Parade and Nariman Point are prime examples of that. In both these locations there is a 60% occupancy in commercial segment and almost 100% in residential.

Unreasonably Heavy Taxes: - Sometimes, in the process of getting the maximum out of something, the Indian authorities kill the golden goose. Nariman Point is a striking example of this. The Municipal corporation has raised taxes to the extent that they are even higher than the rent, a lessee can get. Now the matter is in the court and all the stakeholders are wasting their time!

Due to these factors, Mumbai is slowly becoming an uncompetitive city compared to its national and International peers. MNCs are setting up their offices in Gurgaon which was unheard of, some decades ago. Bangalore became the Silicon Valley of India for start ups.

In next post we will discuss how to handle the above mentioned issues and make Mumbai again the city of enterprising people where even exchequer shall gain.

We also look forward to hearing from you so do share your thoughts by dropping a comment here!

For Students Finding Rooms / Paying Guest Accommodation in Mumbai

With the commencement of the new academic year, parents from all across India storm Mumbai for their children’s admissions, and with that begins their house hunting trauma. From our last decade of experience, we know what this trauma feels like. These parents begin to believe, that Mumbaikars- be it their relatives, friends or acquaintances, are the most unhelpful people, while real estate agents make it to the top of their list of Most Unfriendly People in the world.

Now why does this happen? Let me explain you why, through this illustration.

Let us assume there are 1000 students each year, arriving in the city for admission and are searching for accommodation, out of which easily 800 realize that they do not have enough marks to secure admission in a college of their choice and have to return. 

Of the remaining 200 that now have a reason to reside in the city, about 100 would have succeeded in getting accommodations through hostels, around 50 would pile on relatives and friends while the remaining would either manage to get the place through their relatives, friends  and acquaintances or through a broker after much hassles and headaches.

Now these people are very few, so brokers don’t even like to work for these types of clients. 

A Real Estate Broker’s business model is result-based, and not effort-based. They don’t make money by showing properties or accommodation. They make money only when some one finalizes some thing through them and pay them their cut.

Having worked for more than a decade in this sector, we, at RealEstateDealStreet.com, are trying to change this business model. We have the data base of owners which we intend to share with prospective accommodation seekers. You can go and view the owner’s place and close the deal yourself. However, if you would want us to talk to them and iron out differences, we would be happy to negotiate for you. In this process you are directly in touch with owners and at the same time you have an expert at hand. We have a ready questionnaire covering all possible issues between the landlord and tenant, thus saving you the trouble and hassles and most importantly saving your time in this expensive city, where you might be staying at a hotel. 

And what’s more? We can also provide you good references from your acquaintances who took accommodation through us! Check out our website for further details!

Advantages to Paying Guests: - 

You can start the search from your home town, so that even before you come, you have a fair idea of what to expect and what not to.

You save on time, for if every thing goes according to plan, you could move in the very next day.

No begging to brokers, finally.

RealEstateDealStreet.com works across Mumbai so regardless of which area your college is located in, we can find you a place near by. This saves you time on dealing with multiple area-specific brokers! We have fixed charges, unlike brokers who increase rent, to get higher brokerage.

Advantages to Landlords: - 

You only get serious clients.

You can screen them whether they fit your criteria before actually meeting them, something which is not possible when you deal with brokers. It saves your time. Also, nobody will come to know in your building society, that you have a PG, and create unwanted noise, because prospective PGs won’t be accompanied with loud and known brokers!

RealEstateDealStreet.com also helps you doing back ground checks of the prospective PG.