By Nagaraju, CEO, Rentprop4U
The real estate industry is faced with numerous unresolved issues. These issues are tackled by bringing various new schemes in the market. Builders are unable to follow through with their schemes and face the risk of delayed projects, mainly due to the undertaking of multiple projects, with the revenue generated to fuel the existing ones and the impediments faced by them in offloading unsold inventory. According to the market data, the unsold inventory stands at 7lakh units in Q2 of 2018. Indeed, if the industry needs to drive down the number of unsold inventory, they need to adapt such schemes as the rental assurance scheme. The industry has also seen a 50% jump in overall housing launches over the last quarter, which makes such schemes, a panacea for the existing inventory crisis.
The rent assurance scheme is often a failed attempt, proposed by builders to deliver rental returns to buyers, during or after the construction of the property. The issue is often left unresolved, as builders offer these projects at higher rates than normal, which is eventually used to pay off the assured rent to buyers. In worst cases, the buyers are left with no rental returns and such schemes are not governed by regulatory laws and as such throw owners into the risk of lengthy court ordeals.
As to why these schemes have sprouted, we’d have to look at the bigger picture with recent RBI reforms, restricting capital flow to developers, who then focus on such marketing gimmicks to generate the capital. But this raises red flags even for developers who are legit in their approach and execution.
On the flip side, if these schemes are backed by reputed property management companies, who assure owners the rental and management of their properties through legally binding agreements, then rest assured owners can benefit off of this scheme by easing their financial pressure of paying off monthly EMI and focusing on the allocation of resources. The scheme also looks promising as it reduces the risk of delayed housing projects. Property management companies play a significant role as a trusted source, to find tenants at the right time, providing owners the needed assistance for their property and builders a quick run for the effective completion and sale of their projects. The collaboration takes effect as soon as the properties are sold out. When property managers tie the hands with builders, to assure monthly rent to owners investing in rental properties, they find tenants for owners and pay them a monthly rent according to the market prices.
Several notable property management companies are up for providing a footstool, towards the successful implementation of this scheme. Rentprop4U is one such property management company, providing complete end to end solutions, from finding tenants and sending regular updates of the property, to managing the property, for the entire 11 months of the agreement period. They are also extending a hand, to help builders provide rent assurance to buyers looking to make a monthly investment through their rental properties. Eventually this co-venture will boost the sales, and contribute to the economic growth of the residential market.
Corporate Comm India(CCI Newswire)
