Things You May Not Know About Becoming A Property Owner in India

Becoming a property owner in India is a good financial move for those who want to invest in real estate. Property owners are able to take advantage of a wealth of tax benefits while their property appreciates in value and the rental income rolls in.
Still, landlords do face some unique challenges that newcomers to the real estate arena are often not adequately prepared for. Routine maintenance, repairs, and cleaning aren’t all that landlords are responsible for. The landlord-tenant relationship is an extremely complex one that is governed by an extensive and strict set of guidelines.
Most people rent before they buy, and thus most people first experience leases as a renters. As a renter, it may initially seem that a lease protects the renting party, but this could not be further from the truth. The rental agreement is actually in place to protect you, the Property owners. All Property owners need to understand this in order to sidestep any potential legal issues down the road. Tenants in Bangalore are given certain rights immediately upon occupation of a property, even if they have not paid any rent or signed a lease. The lease is actually intended to limit tenants’ rights, making it vital that a lease be drawn up and signed before any tenant is given access to a property.
In Bangalore, the Property owners-Tenant code that prospective landlords should study, in addition to other state laws. These laws can greatly affect your property, and is especially true when defining tenancy. As a landlord, you should be aware that anyone allowed to stay on your property for a specific amount of time will automatically become a tenant and be offered the same rights as a tenant. The amount of time varies by state, but it is entirely possible that you could kindly offer your couch for a week only to find out that you have to give your initial guest a 45-day eviction notice. Something as simple as allowing a person to sleep in an apartment and use your common facilities, i.e. the kitchen, can be enough for a person to claim tenancy.
Many Property owners believe they can budget their rental figures, especially if renters pay in cash. Not only is the Tax savvy to these devices, but also it is just never worth the risk. Claiming losses on a rental property for more than a few years is enough to set a red flag on your account and potentially trigger an Income Tax audit. Ultimately, stating your rental income will be financially beneficial if you plan on investing in more rental properties in the future. Otherwise, you may find yourself approaching lenders for an investment loan with a tax return showing only losses for five straight years.
Skipping an expensive credit and background check may seem like an excellent way to save money at the time, but it will only cause heartache down the line. Tenancy applications and background checks exist for a reason. While people may usually seem trustworthy enough, they can also be extremely irresponsible. Instead of skipping standard protocol, you should consider transferring the cost of the application to the tenants. In many real estate markets, tenants will not bat an eye at a reasonable application fee. When looking at credit checks, make sure you look very carefully for any prior issues with landlords and/or evictions. Patterns form for a reason.

Anyone who has faced the terrifying threat of eviction may feel as though it is an incredible power wielded by all landlords. While eviction may seem frightening at first, landlords actually have very limited control over the situation. Evictions need to be officially filed, even if the tenant has stopped paying rent. Once the eviction has been filed, the tenant will still have 30 to 45 days vacate, depending on the local laws. This is 30 to 45 days that a non-paying tenant will have free run of your property and potentially damage it. Furthermore, even after the 30 to 45 days the landlord cannot take any physical action to evict the tenant. Landlords cannot shut off utilities or change the locks. Instead, you need to consult the legal professional and petition to have the tenant removed. An actual eviction proceeding can go on for months, especially if the tenant chooses to contest it.
While becoming a landlord seems like an intimidating process, those that are willing to tackle the challenge will eventually find themselves raking in significant rewards. Owning and renting out property gives you a steady source of income independent from other employment or traditional investment vehicles, but this income does come at a cost. You need to become extremely well versed on all of the laws and regulations regarding your state and you will need to be extraordinarily conscientious throughout the entire process.
Are you considering an property managers? Use Property Management Company to discover hidden investment opportunities nationwide. 
 

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INVESTENT ON REAL ESTATE AT BANGLORE –A RETHINKING

From the period pre-history itself human being have the tendency to own his own land,or the feeling of ownership over something growing according to ages. Today in society the ownership over land or fixed asset becomes a criterion of social status. (But according to present situation there should discuss whether this image is affordable for a salaried or professional class.) The availability of loan from financial institutions fosters the urge of person to capture a building or land easier.
But the investment in real estate is somewhat different from the simple ownership on a residential set up.In India, days after the demonetization the financial investment on real estate or business related to that are actually not so fair. In actual sense the degeneration started since 2014 onwards.So before entering to real estate business in a city like Bangalore the investors should take care on it.
First with an economic analysis on real estate investment, it gives more or less the same returns as Fixed Deposit over a period of 20 years.It offers an annual rent anywhere between 2 to 5% of the total asset valuation. It is less than the  returns on an FD and less than the EMI payments being made.
 Secondly, It’s noteworthy that 100% tenancy is not definite. Therefore, revenues could be even smaller. These above reasons are applicable to an investor either big or small.
Besides these, in some places the estimate to entitle the land for a building is more expensive than the construction of a building. For example cost of piling is greater than the total construction of a building. 
In certain cases the emotional attachments to the land hides the real income generating from the investment. In such situation the owner never try to loosen the property due their emotional attachment with ancestors, family or anything like that. These also lead to financial crises.
In addition to this, there are many liquidity challenges in real estate, For example when an investor needs urgent cash, and it might not be easy to find a buyer, and of course the urgent sale usually makes much less than the true value of the asset.
In certain cases many the investors should face many litigious problems such as family disputes, encroachment by tenants or anti-social elements, a government entity wanting the land for a public project, ambiguity in government records etc.
After these a growing investor should liable to pay taxes and utility bills, maintain it in organized condition and also find new tenants as and when needed. Comparatively, other asset classes barely require time and energy.    
In certain practical senses the Value-addition doesn’t yield returns.
An investor might add fixtures; interior design and gadgets to enhance the experience of living in a property, but the next investor may want to customize the property in a different manner and will, therefore, be unwilling to compensate the seller for the extra investments made. Funnily enough, buyers and sellers often can’t agree on even vaastu considerations.
    So as a conclusion ,in the present financial arena the investment on real estate sector is somewhat unfavourable, if it has not been carried out with enough study.

                                                                                                                                                                                                                                 STUDY CONDUCTED BY RAKSH RESEARCH TEAM 

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Co living; an emerging idea of sharing residential space…

The idea of community living is not in fact a new one, but unlike the old-style concept, the notion of co living is becoming a sustainable category in the real estate sector or it is becoming the best choice of youngsters who seek the attic of community living.  As a noun related to real estate sector the word co living expresses the idea of shared housing, designed to support a purpose-driven life, which opens the values of openness, sharing and collaboration.

This type of living facilities targeted young digital nomads, who move painlessly from one job to another, one metropolis to another, one abode to another. Yes it is the current trends in youth professionals, it’s very unlike the previous generations, and the digi nomads never try to derive their sense of security for repetitiveness that means the same job, the same city, the same residence.

This idea is like that of sharing a drive with ola or uber. Probably we can say that in the sense of economy it is similar to a paying guest accommodation. But paying guest accommodation never satisfied as a choice of life style. That is key the privilege enhanced by the idea of co living. It  is a way of living focused on a genuine sense of community, using shared spaces and facilities to create a more convenient and fulfilled lifestyle.

It is assumed that through this process one can attain the following philosophical outcomes

  • The presence of Community feeling along with individuality
  • Openness and collaboration over the state of competition
  • Idea of Sharing terminated consumption
  • Inquiry and experimentation over the status quo
  • Responsibility and action over cynicism and resignation

Besides these the following realizations are to be considered.

Most young professionals simply cannot afford to buy a house within the city. So, renting becomes the only option. With urban millennial making a little over a huge amount in a year as their rental budgets translates to mere 2-3% yields to property owners. One of the primary reasons for low rental yields is the structural design of a house which hasn’t evolved with time.

A study by the research team of Raksha Property Management, a leading consultancy service in Bangalore and other cities in India, reveals that a professional spends only 45 minutes a day in the living room and kitchen, and about nine hours in the bedroom. These two portions carry the 60 % of the real estate price, while the bedroom accounts only 40 percent of the cost. Hence the idea of Co-living spaces optimise the real estate utilisation by sharing the lower utilisation areas with a larger community, residents easily save about 10 per cent of the expense and property owners get a higher yield on the property on account of being able to accommodate more people on a floor plate. What’s more, residents living in co-living spaces in most cases pay an all-inclusive price that covers electricity, TV, housekeeping, repairs and maintenance, et al.

Residential safety is another merit of co-living, it is just more than having a security guard. It’s about a sense of wellbeing that the space shows. When you opt for a co-living space, you can be sure about 24-hour security, CCTV surveillance, access card entry, background verification and screening process of the staff as well as residents. This place realty segment is a lot more organised and transparent than paying guest accommodations and renting options, making it a safer choice for young professionals in a new city.

Modern youth want to behave as free birds; they explore new horizons, evidently in no hurry ‘to settle down’. However, the journey can often get lonely. Studies suggest that more than 40 percent suffer from chronic loneliness.

Co-living spaces offer the perfect antidote. Living in a community of like-minded individuals – bonding over breakfast and barbeque evenings – makes it easier to have meaningful face-to-face conversations and cherishing the comforts of community living.

Someone wants to remove the stress out of their life by paying one bill that covers everything like the idea of co living. Someone fed up of bad landlords and tired of waiting months to get anything fixed loves the idea of co living.

According to Mental Health Foundation, among the young the “loneliness epidemic” has gone viral.

Nearly 60 per cent of 18- to-34-year-olds are suffering from this state of illness; in such situation co living concept often provides an atmosphere for mental empowerment.

 

So whatever your reason, there may be something which will result positively in co-living for you.

Co living in a Women-friendly Environment

With growing safety concerns, especially for women, it’s important to build residential spaces that exude a sense of comfort and security. It takes more than 24-hour CCTV surveillance to make them feel safe. So, in the age of insured, the co living facility provides certain extra privileges to the feminine gender.

This movement in turn, is paving the way for an emerging, capital-efficient way of living. In Europe and the US, co-living is already evolving into a fast-growing asset class, ticking all the right boxes for real estate players as well as new-age custom.

In the sense of a globalized workforce, young professionals today are traveling and relocating frequently. The traditional leasing commitments don’t work for this always-on-the-move generation that demands more than cookie-cutter solutions.

Co-living offers a responsive living arrangement that not only keeps the costs under control, but also makes the logistics easier. Depending on requirements, one can take an accommodation on lease for 12 months or as short as three months in almost all metro cities.

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Why do you need Property Management Company in India?

Why do you need Property Management Company in India?

 

A competent and profession property manager can add significant value to your house or apartment in India.  Here are a few ways that a good property manager earns their keep:

Higher Quality Tenants

 

Getting a good quality tenant will free you from a lot of head ache as an owner. It is certainly possible to get a bad tenant out of your home once they are in, but it’s a real hassle and you are so much better off never accepting them in the first place. A thorough screening process results in reliable tenants that:

  • Pay on time
  • Rent longer
  • Put less wear and tear on the unit
  • Generally, cause less problems

 

Bangalore based Raksha Property Managers has seen thousands of applications and knows how to quickly dig for the real facts about candidates and analyze that information for warning signs. By allowing a management company like Raksha to handle the screening, you will also be shielding yourself from rental scams directed at owners, and discrimination lawsuits resulting from an inconsistent screening process. This kind of experience takes time, and insomuch as it means avoiding bad tenants, scams and lawsuits it is arguably one of the most significant benefits a property management company will provide.

 

No more costly and time consuming legal problems

Experienced landlords know it only takes one troublesome tenant to cause significant legal and financial headaches. A good property manager is armed with the knowledge of the latest landlord-tenant laws and will ensure that you are not leaving yourself vulnerable to a potential law suit. Each state in India have their own laws covering a number of areas including but not limited to Tenant screening, Safety and property conditions of the property, Evictions, Inspections, contract addendums, Terminating leases, Rent collection etc.

Avoiding a single law suit can more than pay for the property management fees, and spare you time and anguish.

Shorter vacancy cycles

A property manager will help you perform three critical tasks that affect how long it takes to fill your vacancies:

  • Improve and prepare the property for rent – A property manager will suggest and oversee cosmetic improvements that maximize revenue.
  • Determine the best rent rate – Too high and you are stuck waiting, too low and you’re losing money every month the tenant is in the unit. Determining the optimal price requires knowledge of the local market, data on recently sold comparable, and access to rental rate tools.
  • Effectively market your property – An experienced property management company has written hundreds of ads and understands what to say and where to advertise in order to get a larger pool of candidates in a shorter period of time. Additionally, because of their volume they can usually negotiate cheaper advertising rates both online and offline. Lastly, they are familiar with sales and know how to close when they field calls from prospects and take them on showings.

 

Better tenant retention

Raksha property management company has a time-tested tenant retention policy that ensures happy tenants with lengthy stays in your properties. These kinds of programs require a consistent, systematic approach, which is where a good property management company will shine.

Tighter rent collection process

The way you handle rent collection and late payments can be the difference between success and failure as a landlord. Collecting rent on time every month is the only way to maintain consistent cash-flow, and your tenants need to understand this is not negotiable. By hiring a Raksha property manager, you put a buffer between yourself and the tenant, and allow them to be the bad guy who has to listen to excuses, chase down rent, and when necessary, evict the person living in your property.

Assistance with taxes

A property management company can help you understand which deductions you can claim, as well as organize the necessary forms and documentation to make those claims. Additionally, the property management fees are also tax deductible.

Lower maintenance and repair costs

Good maintenance and repairs keep tenants happy and preserve the value of your investment which make them a very important part of land-lording. By hiring a management firm, you gain access to both their in-house maintenance staff, as well as their network of licensed, bonded and insured contractors who have already been vetted for good pricing and quality work. This can translate into significant savings compared to going through the yellow pages and hiring a handyman yourself. Not only is the firm able to get volume discounts on the work, they also know the contractors and understand maintenance issues such that they are capable of intelligently supervising the work.

Increase the value of the investment

Preventative maintenance is achieved through putting systems in place that catch and deal with maintenance and repair issues early on, before they grow into larger more costly problems. This requires a written maintenance check program, detailed maintenance documentation and regular maintenance visits. The management firm can also offer you suggestions and feedback on upgrades and modifications, both how they will affect the rent you can charge, as well as their impact on maintenance and insurance.

These results can only be expected if a management company is competent, trustworthy and a good fit for your property. Raksha Property Managers is a Bangalore based property management company. They manage property in Chennai, Hyderabad, Pune, Mumbai & Delhi.  If you have any more question regarding property management in India, feel free to reach out to us at info@rakshapm.com

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Property Management weds Technology: Five new technologies to manage your real estate in 2018

With all its ups and downs for Indian Real Estate Market, 2017 was a year of significant change— in politics, culture, science, technology and more. Advancements in areas like Artificial Intelligence(AI) and, the most sought after cryptocurrency- Bitcoin has far reaching implications across industries. What were once cutting-edge technologies have made their way further into the “real world” and are poised to have a profound impact on the way business is done in 2018.

For evidence of this trend, look no further than the real estate sector, where a range of technologies are opening up the horizon and changing the rules, giving property owners and real estate professionals new opportunities to thrive. Here are five technologies which help to manage your property in India in the best way.

Artificial Intelligence

Based out of a recent survey, Team Raksha predicts, 75% of developers will use AI technology for at least one business application or service in 2018. This will certainly hold true in real estate, in which success hinges on an agent’s ability to nurture existing and new client relationships. In buying or selling a home, people are making one of the biggest decisions of their lives and the process can be overwhelming, not to mention confusing. It’s important that property owners/managers answer questions in a timely manner, but that was once extremely time-consuming.

Chatbots, powered by AI, is one among the artificial assistants. Property Owners and property managers can utilize virtual customer service agents and chatbots to automate discussions with clients, freeing up human time to address more complex issues. AI “employees” enable economies of scale opportunities, meaning agents can provide attentive, hands-on, high-quality customized customer care at very little cost.

Big Data

2.5 quintillion bytes of data are created every day. This data holds vast troves of value for real estate owners/managers who can use it to gain insight into customers, understand market trends and improve efficiency. In 2018, big data will transform the real estate industry by making it more transparent. Home evaluation reports, sale prices and demographic data are now in the cloud and can be analyzed to provide more objective appraisals. Heightened transparency will promote better decision making and streamline the sales process- making it more efficient. In addition, property owners/managers can use big data technologies to turn customer data from sources like social media into targeted marketing that delivers the right message to the right customer at the right time.

VR Camera/Drones

Virtual Reality Camera turns to be one of the most demanding technologies to enter real estate marketing since the inception of internet market space. To start, VR cameras enable owners/property managers/agents to integrate dramatic camera photography and video tours into online listings. Raksha Property Management, a leading Asset management company based in bangalore,  found that 90% of homebuyers rely on the internet as one of their primary research sources, and for over half, the web is their first step. Capturing their attention requires impressive, detailed visuals, and the agents and managers who pull ahead will be those whose photos and videos stand out. Drones can essentially be used as flying cameras for photos and videos. Real estate photographers can use the technology to produce sweeping shots of the landscapes around homes and 360-degree views of home exteriors.

Virtual Reality camera will also enable owners and managers to conduct virtual open houses. Less than one in five buyers make an offer without first seeing a house in person, but open houses aren’t exactly convenient for anyone involved. Drones and VR cameras allow agents to give virtual tours, saving time of buyers, sellers and agents, as well as opening the door to buyers who don’t live in the area.

Mobile Devices

For all the talk about how young generation aren’t buying houses, Raksha has found over the last four years that millennials and Generation Y make up the largest group of homebuyers. In 2018, the real estate industry will continue to evolve to be more millennial-friendly, which means more mobile-friendly. Millennials spend more time on their phones than any other age group and rely on their mobile devices to do just about everything. The owners who succeed will be those who enable prospects and clients to access all the information they need, including listings and documents, from their mobile devices. Mobile-first will soon become the norm.

Bitcoin

Bitcoin captured Indian media headlines in 2017 as the value of the cryptocurrency soared to unbelievable heights. The impact of Bitcoin extends far beyond asset trading, however. The technology is redefining how money is exchanged and this is having a big impact on real estate. More buyers are interested in paying with cryptocurrency, which is leading some building owners to accept bitcoin as a way to gain a competitive edge. There are also emerging services that provide landlords and tenants a way to pay and receive rent in Bitcoin. NRIs can repatriate their income into their home currency using the cryptocurrency without any regulation and bank fees.

Beyond Bitcoin itself, blockchain technology is driving the real estate industry forward in other ways. It could enable property listing companies, or even managers, to improve the way property data is shared between managers, agents and consumers, leading to the creation of a listings that grants real-time access to updated property information. Blockchain tech could also provide a central database for historical title records. Finally, blockchain technology could provide a new way to verify identities in real estate transactions, speeding up the process and minimizing the risk of fraud. Hassle

The research team of Raksha Property Managers & Consultants predicts that 2018 is going to be a big year for the real estate industry. Technology will help make the process of renting, managing, buying and selling a home more streamlined, efficient, secure and convenient for everyone involved.  Raksha helps its clients hassle-free business using these new technologies. For further questions, you can reach us at info@rakshapm.com

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