Rental Management Service – A Convenient & Hassle-free Service!

Do you have a house or an apartment or any other property that you have rented to someone? Do you face tough times managing tenants, collecting rents & maintaining those properties? Do you want to get rid of the tension of your property located in a different city? If your answer is yes then the following post might help you out in a big way. Check it out:

Issues associated with renting a property

While we do advocate renting a property, we do not deny the stressful issues that come along with it. Your tenants are most likely to give you following tensions:

• Irregular or non-payments of rent
• Untimely vacating the property
• Unexplained excessive maintenance costs
• Damaging the property
• Sometimes not vacating the property
• Non-payments of public bills

Other than these, other issues may include – finding a new tenant, conducting legal formalities before handover, settlement of dues & several others.

I know after reading all the above problems some of you may have started doubting the institution of renting & it’s very obvious too! So what to do? Relax mate; you don’t have to do anything. Everything will be done by the guys running Rental Management Services.

Rental Management Services

These are new emerging services which take care of all your rental problems. You just have to register with them & pay them a commission from the monthly rent that you receive. These guys will:

• Collect timely rents for you
• Find you genuine tenants
• Maintain your property
• Complete all the paper works
• If you desire, sell your property
• Renew agreements & rental deeds

When we first came across these agencies, we were skeptical about their functioning. But after seeing them work in Hyderabad, we were mesmerized. These guys will definitely take all your tensions & stresses over their mind at just a small cost.

Is it worth paying them?

Just one word – TOTALLY!

You can totally trust them & enjoy your sleep back at home.

Disclaimer: The above post is just a piece of information & is not intended to advertise any agency. Although we trust their functioning, we do not take any responsibility for any of such agencies.

------ Thanks for reading RealT Horizon J ------

Serviced Apartments – An emerging arena in Real Estate

Not all but some of our readers will agree with this post. We recently got a chance to study the functioning and business model of Serviced Apartments in Hyderabad (India) and felt the need to share the same with our readers. Let’s see how effectively we can communicate our views on this topic.

Serviced Apartments – What are they?

For those who are not aware of the term Serviced Apartments; they are no different from normal residential apartments, but with an exception that they provide complete services to the tenants.

Serviced Apartments are fully furnished houses including all the white goods that are provided to the tenants for use. The tenants residing in these apartments can make use of all the “free services” provided by the owners – house-keeping, food, electricity, laundry etc.

In short, a Serviced Apartment can be thought of as a variant of a PG (Paying Guest) accommodation, with some exceptions.

Business Model

This is one of the most exciting and profitable business models that can exist as recurring income source in real estate. Here instead of charging for apartment as a whole, tenants are charged on per bed basis. This will become more clear from the following example:

Shown below is a residential apartment in Hyderabad having 25 apartments of 3 bedrooms each –

Now consider these 2 scenarios –

Scenario 1: Rent as an apartment

Earnings

Rent per apartment/month	No. of apartments	Total/month
Rs. 25000	25	Rs. 625000

Costs

	Cost per apartment/month	No. of apartments	Total/month
Misc	Rs. 2000	25	Rs. 50000

Net Profits

Profit

Rs. 575000

Scenario 2: Rent as Serviced Apartment

Earnings

Rent per bed/month	Total beds per apartment	No. of apartments	Total/month
Rs. 10000	6	25	Rs. 1500000

Costs

	Cost per apartment/month	No. of apartments	Total/month
Housekeeping	Rs. 2000
Electricity	Rs. 2500
Wifi	Rs. 1500
Food	Rs. 6000
Misc	Rs. 3000
Total	Rs. 15000	25	Rs. 375000

Net Profits

Profit

Rs. 1125000

So after looking at the figures of both the scenarios, we have very less to explain anything. You can cultivate money in the second scenario and at least we are considering jumping in this arena as soon as possible!

Disclaimer: The figures quoted above are exact figures of a Serviced Apartment in Hyderabad, but we are not sure whether this will hold true in other cities as well.

------ Thanks for reading RealT Horizon J ------

Real Estate for Small Investors, is it?

First of all, apologies for a delayed post this time. We were hooked up with some Real Big issues!

So tell us, where do you think is money in RealT Sector? Or is it just a fad & small investors can never make out anything from this sector?

As far as what we have concluded from our secondary research data, it seems that more than 65% of people are not interested in investing in real estate primarily because they think – “we require huge investments to buy a property!”

We would not completely deny this fact but at the same time, it doesn't entirely hold too. Before we go any further and clarify this ‘myth’, let us first give you a glimpse of where money lies in RealT Sector:

So as apparent from the above categorization (we are assuming that you are a normal investor with not much knowledge of other fields of real estate), there are several fields apart from transactions and development from which you can make money in this sector. Take for example Relocation Services. By relocation services, we mean that you can provide services to relocate people or businesses & arrange for accommodation and other services in case required by them. This will provide you with an opportunity to make some handsome amounts with fewer efforts.

Services like ‘Appraisal’ require technical know-how of how to value a given property. If you have the proficiency to do this, you can make this as your career and trust us, you won’t require anything else to pursue as your profession.

On the similar lines is another vertical – ‘Property Management’. As Portfolio Manager is to Stock Market, Property Manager is to Real Estate. And we think that we need not to reiterate how much fortune a Portfolio Manager makes! If you have some expertise and experience in the field of real estate, this is your place to be.

How can Small Investors invest in Real Estate?

This is probably the most important question that haunts every middle-class individual when he/she starts earning. With the rise of middle class population in India in recent years, people who just graduate from the universities look forward to invest in some vehicle. But due to unavailability of any structured or convenient vehicle for investment in Real Estate, the obvious choice that they are left with is – Stock Market or Fixed Deposits.

We would like to throw some light on how a mid-income group person or a small investor can invest & make money in this market. There are several measures available for this purpose, few of which include:

• Affordable Housing
• Attractive EMI schemes
• Joint Investments
• Private Lenders
• REITs

Within the scope of this post, we will just try to explain Affordable Housing & later we will take on other measures.

Affordable Housing

As per JLL’s report on ‘Affordable Housing in India – 2012’, there is no clear-cut definition of the term ‘affordable’. This is because it has different meanings in different scenarios as it is a relative concept. Just going by KPMG’s definition of affordable housing, it can be seen as:

	Income Level	Size of Dwelling Unit	Affordability
Economically Weaker Sections	<INR 1.5 lakhs pa	Upto 300 sq. ft.	EMI to Monthly Income: 30% to 40% House price to annual income ratio: Less than 5:1
Lower Income Groups	INR 1.5-3 lakhs pa	300-600 sq. ft.
Middle Income Groups	INR 3.0-10 lakhs pa	600-1200 sq. ft.

 
  Source:  KPMG

Affordable housing is a new concept which emphasizes on catering the needs of the above 3 mentioned income group individuals. The differentiation is based mainly on the size of dwelling unit and the location of the unit.

Small investors, typically falls under the umbrella of Middle Income Group. There are a number of trusted and reputed players in the business of affordable housing all over India, mainly in the metropolitan cities where the concentration of LIG’s and MIG’s is maximum:

Source: JLL Research, 1Q12

Closing Remarks: It is said “where there is will, there is way..” This falls apt in case of real estate investing. Though seemingly very tough, it becomes simple if you want to devise ways in this sector. And believe us, the pace and size of returns which you can expect from real estate is far more than any other investment.

---- Thanks for reading J ----