The real estate world is plagued by properties that simply won’t sell out. No matter how hard you try, you won’t get the price you’re looking for, and a good buyer just won’t appear on the scene.
This hampers all your business plans that you had made with the property and also hits your financial budgets. In such a scenario, renting out your property can be a smart decision.
We at Spacio, have been dealing with Commercial Property in Mumbai from a long time, and we understand that such properties don’t sell out fast. We have observed that people have started renting out their properties in hopes of better financial gain that they’d make otherwise. This is true for residential properties as well and we’d like to shed some light why this is becoming the norm.
Supply Meets Demand
Nearly 31% of Indians don’t own any kind of land or property. At the same time more than 10 million homes in India are vacant, according to a BBC report.
There is a sharp contrast between the people who don’t own a house and number of houses lying vacant. This simply means that the economy of the country is poised in a way that people a lot of people can’t afford to buy homes and hence prefer living in rented accommodation.
It clearly reflects that the demand for rental property and Rental Real Estate Brokers is quite high. People search for rented properties in metros like Mumbai, where living space is shrinking by the day. In such conditions, renting out your property till the time you get a decent buyer is a safe bet.
Return on Investment
Renting offers a significant return on investment when your property is just lying around waiting to be sold.
Even if you sell your property after three years, hoping a profitable increase in its price, you can make several lakhs by just renting it out in the meantime. This is true for cases where people are using the property while waiting for it to sell.
On average, a small residential property in Mumbai can yield an income of about 10,000 a month. The same rental income over three years with yearly appreciation becomes almost 4 lakh rupees. Which is at least 20% of the amount you’ll make after selling it after three years.
At the end, you would have made 120% of the profit you initially envisaged.
Property Maintenance Issues
The properties that just lie around are subject to getting damaged due to lapse in maintenance. If no one is using in the property, it’s bound to get hold of damage by environmental circumstances and pest.
Therefore, renting the property ensures that it’s regularly maintained and that too without your intervention. Your tenants would be using the property and daily maintenance activities would be undertaken.
This further saves your headache of checking on the property from time to time, or assigning a property manager for its upkeep. It also saves you cost of refurbishing the property in case it starts getting stale, which is the case with most Commercial Property in Mumbai at large.
Spacio Realtors 