Hyderabad Reality Scouts Landlords

By Ayaan Khan

Agents Seek Business With Assured Returns As House Owners Too Scout For Tenants

As people are getting cautious about investing in property, real estate agents are turning to rental deals in the hope of earning some money. Despite rents seeing a good 15-20 per cent dip in the last three months, agents feel it is comparatively more stable business and assures some returns.

Imtiyaz Ahmed Khan, an agent, who had not managed to sell many properties of late is glad about the money he is making through rental deals. “Commissions on sale of properties is anyway not great. We charge only 2 per cent for a property valued at less than one crore and one per cent if it is more than one crore. But people are not ready to pay even that now. Anyway sales have dipped hugely and even prospective buyers are only using us to get introduced to the owner. After that they are directly negotiating with the owner in order to save on our commission,” he says. Agents like Khan also cash in on the desperation of house owners. Aware of the poor market condition, owners are now ready to pay agents extra commission to get tenants. “What seemed like a waste of money earlier has now become a preferred choice of owners,” says a brokerage manager.

However, not many agents in the city share the same view. The dip in rents have reduced their commissions drastically. With people opting for cheaper places, their monthly income has come down by almost 35-40 per cent.

“Houses that were earlier rented out for Rs 25,000 per month are now being given for as low as Rs 18,000. Duplexes in the Malaysian township that fetched at least Rs 45,000 as rent per month is now on offer for just Rs 25,000 per month. With owners settling for such low rents, our commissions are suffering. As against one month’s rent for these deals we are now charging something between Rs 5,000 and Rs 10,000,” says Asim Khan an agent adding that furnished houses with the latest amenities situated in posh localities, which in better times would have owners demanding Rs 35,000 to Rs 40,000, are going for an unbelievable Rs 20,000 only.

Real estate experts point out that the dip in rentals is also a much needed correction. In the last few years, house owners, buoyed by the rising property prices in the city, had been quoting astronomical rents. Builder P Srinivas, whose residential complex in Banjara Hills has several flats lying vacant for long is hard selling them to any customer who looks even remotely interested. He is not only renting out two-bedroom flats, that would have fetched him anything between Rs 12,000 to Rs 15,000, for just Rs 8,500 but is also relaxing the deposit amount for his tenants.

Instead of the usual three months advance money, he is settling for only two months deposit. The fact that people are now ready to compromise on certain grounds is also affecting agents.

While some are moving to the outskirts of the city in search of cheaper accommodation, others are settling for apartments without high-end provisions like a centralised gas connection or wifienabled zone. “People are not hesitating to take up residence even beyond Hi-Tec city. The rents there are comparatively lower and so is our commission,” says an agent wryly.