The real estate industry in India has grown rapidly over the years, owing to the growing demand for new and innovative housing designs, which has attracted potential investors, brokers and customers. Being the 4th largest sector in terms of FDI (Foreign Direct Investment) inflows, its importance from an economic point of view is quite prevalent in the country’s property development domain, specifically the residential property market.
Despite experiencing slow growth for over 3 years, the real estate market in India has begun to look promising in the current fiscal year, helmed by the rising need for corporate and residential properties of an increasing urban population. With so many individuals gradually shifting base to mega cities,mostly for professional reasons, real estate brokers are always on the lookout to attract potential clients who are looking for affordable rental space in such places. Ensued by such occurrences, competition in this sector is massive now as every developer aspires to become the next big name in this market, with some claiming to bring a unique approach to every project.
According to India Brand Equity Foundation, the real estate market here is so lucrative that its value is expected to reach over USD 180 billion in the next 4 years. The housing domain in particular is extremely significant for its economic growth, contributing around 5-6% of its share to India’s GDP annually. Witnessing this progression, various Private Equity funds and NBFCs have begun to jointly invest in many real estate projects with a view to limit risks and take on bigger transactions.
Furthermore, identifying the growth opportunity, many up-and-coming startups have now begun to foray into the realm of real estate, disrupting the market by making the harrowing process of house hunting much easier for people. Thriving on technological innovation, these startups have created several platforms that cater to varying tastes and preferences of potential tenants and eliminate the tedious process of personally visiting every listing in the market.
Since most brokers usually have some kind of agreement with certain landlords who wish to let out their property for commercial or residential purposes, these agents persuade individuals to choose rental spaces where the former receives a certain percentage of deposit as brokerage .As a result, tenants usually have to shell out more money than what they intended. Therefore, to escape this unorganized system, rental housing startups are gradually becoming the norm in the sphere of residential real estate.
Let us now look at some key points to discover how online rental startups are steadily becoming the most sought after option for potential tenants.
Extended management services
The scope for additional services on the part of the broker is usually limited as they are only involved in helping tenants find a home. On the other hand, Startups not only help them find a suitable place but also assist them with additional management services like customer preference, paperwork, and doing proper recce of the property prior to moving in.
As previously mentioned, brokers negotiate rental prices which include their cut. However, with online rental service providers, only a small fee is applicable which is subsequently added to the deposit once the flat is confirmed by the lessee.
Before finalizing on one place, tenants usually have to perform the herculean task of checking each and every property personally, a process that is time consuming and tiresome. With a startup, individuals can shortlist properties online and then select the ones they are interested in for property visit, which is usually undertaken by a trained professional from the company.
Brokers are usually involved in the house hunting process only till a place is finalized. With home rental startups however, tenants gain additional support which can range from – negotiation with landlords, checking up on customer grievances, or any repair work required.
Payment of Rent
The norm dictates that tenants pay their rent on time, directly to landlords. However, these days many portals give one the option to pay their rent online using secure methods, eliminating any cause for worry.
Standardization of rental amount
House hunting with brokers usually entails difference in rental agreements which can differ from place to place. Whereas, online rental platforms, can easily standardised rental prices with little change in pricing structure.
Tenant Screening process
Prior to letting out their property, a landlord is usually reliant on the broker’s judgment of a potential tenant. Since they don’t have any screening procedures in place, both parties, more often than not, are clueless about the lessee’s background and general disposition. Eliminating this concern, housing rental startups have come up with a unique solution; those looking for a suitable rental accommodation are now required to fill out an application form citing information which a lesser may require, facilitating a smoother verification process.
Better ROI Concept
Many companies give assured rentals. These professionals know how to manage the properties and make sure that they get the market rental returns. Although there is a large chunk of our population who prefer to take the traditional route of house hunting, there are some like the millennial who have started to look for alternatives in the market. Recent trends indicate that with a growing number of people getting access to basic internet facilities, it is becoming highly probable that most of them will opt the services of online rental housing startups while searching for a new home.
Authored By: Sudarshan Purohit, Co-Founder & CEO, Zenify