House rents plummet

House rents plummet


Y Maheswara ReddyFirst Published : 11 Apr 2009 11:59:00 AM ISTLast Updated : 11 Apr 2009 12:18:43 PM IST
BANGALORE: The adverse effects of the economic slowdown, which was confined to IT employees and malls so far, has spilled over to house-owners who let out their houses for rent. Now is the right time for the tenants who want to move to more spacious homes at a lesser rent. Those who want to remain in the same homes can bargain for a reduction in the rent if the house-owner is aware of the economic recession.
With many software companies enforcing pay cuts, most of the employees are looking at other options on how to manage. A lot of IT professionals used to pay Rs 8,000 to Rs 10,000 as rent for 2BHK and 3BHK apartments at Marathalli, Ramamurthy Nagar, Varthur, Madiwala, Koramangala, Indiranagar, Jeevan Bhimanagar, Jayanagar or JP Nagar. But now a majority of these employees want to shift to apartments that are available at cheaper rent while a few of them (bachelors) prefer to share apartments with others. ``My tenant wanted to vacate the house. He said that he can get a house at cheaper rents. I then told him he could continue as my tenant by paying a lesser rent for which he was getting the other house,’’ says S Mallikarjuna Reddy of Marathalli.
A few of the IT employees, who bought houses by availing home loans, are also finding it tough to pay the EMIs. For example, Mohan Krishna (name changed) works with IBM. His take home salary was Rs 35,000. He bought an independent house at Ramamurthy Nagar for Rs 35 lakh. With IBM effecting a 15 per cent pay cut, he is finding it tough to pay the EMI. Now, he wants to let his house out for rent but no prospective tenants have approached him. There are many IT employees like Mohan Krishna who want to give out their spacious homes for rent and move to smaller houses to help pay their EMIs.
A number of houses are vacant in areas such as Malleswaram, Rajajinagar, Shivajinagar, Vasanthnagar and Ulsoor. Earlier, house-owners would not compromise on house rents in these areas. They also used to demand a hefty amount as an advance from the tenants, but now they are ready to accept whatever advance amount the tenants can give. ``Earlier, it was very difficult to get a house for rent in Malleswaram. The owner had an option to select the tenant. Now, the tenants get the chance to select a houseowner who is flexible enough to accept less advance and rent. A house, which used to command Rs 10,000 earlier, is available for Rs 8,000,’’ says Murali, a realtor of Malleswaram.
The recession has also hit the agents badly. With most of the house owners putting up `To Let’ boards with contact phone numbers, the agent’s role has been minimized.
If a tenant got a house for rent through an agent, the former had to pay one month’s rent as a commission to the agent. There were a few smart agents who demanded the same amount from houseowner also. To avoid the middlemen, the prospective tenants opted for direct contact with house owners.
``My friend used to earn a lot of commission when there was a demand for rented houses. For the last three months, he finds it difficult to continue as an agent and he has opened a kebab outlet to make a living,’’ says Venkataiah, a realtor.