Giving a flat on rent is a a mysterious art.

The goals are to maximize the rent and minimize the risk.

1. Maximize the rent:
Ensure the flat does not remain vacant for a long time.
Get the maximum rent per month.
Tenant completes the lease period and does not leave in between.

2. Minimize the risk:
The tenant should not damage the flat.
He should not cause nuisance in the society.
He should leave the flat at the end of the lease period or if notice is given.

(For purpose of discussion, "He" is used as shorthand for "He" as well as "She". No disrespect intended to the fairer .)

Some people are good at one part, some are good at nothing. Some great people are good at both.
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  • A question to all folks here:
    I have prospective tenant for a vacant flat, who is going to get married next month. He was enquiring whether he can get a furnished flat.
    Until now all flats have been equipped with basic stuff such as tube lights, fans, water heater, water purifier, modular kitchen. etc, but never fully furnished.

    For a fully furnished flat, what would be a good configuration? I came up with the following requirements:
    1. Sofa, T.V. T.V. stand in living room.
    2. Extra steel racks in kitchen for utensils. Cooktop, hood, lpg cylinder. (We already give modular kitchen).
    3. Cupboards in both bedrooms. One Godrej cupboard in master bedroom
    4. Double bed in master bedroom, single bed in second bedroom.
    5. Computer table in second bedroom.
    6. Curtains? Curtain rods are already provided

    What furniture am I missing here? And what might be the budget?

    What is the extra amount that can be charged? Need to recover the expenditure within 3 years, assuming that life of furniture is 5 years.

    Finally, is it a sensible thing to do? Till now we have got very good families only, so I can sense that he is a genuine guy.
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  • Abeer, the cost of recovery depends upon the type of furniture you use. If it is Italian, the cost of recovery will be longer or rents need to be increased, if it is made up of bamboo, it will get recovered in 1 year itself. If he is getting married, he will require a cradle too after few days to keep the baby busy:D.

    Btw, after reading this thread, I am sure many of us can become atleast part time RE brokers:D.
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  • Whenever I am running around showing the flat to tenants, my family also throws such comments that I should have become a RE broker rather than a programmer :)

    for( ; ; )
    Wife.out.println("You should have married the damned flat");
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  • Abeer,

    1) Also you can fit your own wall-clock, mirror in bathroom and above washbasin (if any) so tenants dont make extra holes in wall for fitting their own clock and mirror etc..

    2) you can also install a DTH antenna in balcony, so that tenant does not have to install his/her own antenna. This also keeps the wall in good condition.
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  • Originally Posted by abeerbagul
    A question to all folks here:
    I have prospective tenant for a vacant flat, who is going to get married next month. He was enquiring whether he can get a furnished flat.
    Until now all flats have been equipped with basic stuff such as tube lights, fans, water heater, water purifier, modular kitchen. etc, but never fully furnished.

    For a fully furnished flat, what would be a good configuration? I came up with the following requirements:
    1. Sofa, T.V. T.V. stand in living room.
    2. Extra steel racks in kitchen for utensils. Cooktop, hood, lpg cylinder. (We already give modular kitchen).
    3. Cupboards in both bedrooms. One Godrej cupboard in master bedroom
    4. Double bed in master bedroom, single bed in second bedroom.
    5. Computer table in second bedroom.
    6. Curtains? Curtain rods are already provided

    What furniture am I missing here? And what might be the budget?

    What is the extra amount that can be charged? Need to recover the expenditure within 3 years, assuming that life of furniture is 5 years.

    Finally, is it a sensible thing to do? Till now we have got very good families only, so I can sense that he is a genuine guy.


    Speaking as a tenant who has stayed in both furnished and unfurnished apartments:

    You forgot the most important item - refrigerator.

    I think the computer table can be skipped, and you should have a 4 seater dining table instead. This can be used as a work table by the tenant as they want.

    Curtains will definitely make the house look "furnished". However, women have strong preferences about curtains, so it might be safe to go for neutral colors like white.

    Plastic chairs, if you have a balcony, will also be good.

    LPG cylinder and stove top will be one of the most useful things. In terms of priority, my list would be (most important to least important)
    1. Gas cylinder and stove top
    2. Cupboards (storage) in bedrooms and kitchen
    3. Cots in bedrooms with decent mattresses (mattress will be preferable, but cotton will do, but it should be thick and should look like a mattress - usually called "box style")
    4. Refrigerator - obviously, the bigger the better.
    5. Sofa set - minimalistic look but sturdy and functional would be good. Metal might be a good option. Cane looks too cheap and is too flimsy, at least for families, and is actually quite expensive.
    6. Television - LCD would obviously be a "wow" factor. You can actually get real bargains in LCD nowadays, and it might be a clinching factor for high quality tenants. Like, if you stay in a hotel with an LCD, you will talk about it.
    7. DTH, as mentioned by Aditi, would be cool.
    8. Curtains - thin cotton ones in the living room will make it classy
    9. A/C, if you want to get fancy
    10. Plants would be a nice touch
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  • Originally Posted by asliarun
    You forgot the most important item - refrigerator.

    Just make sure it is atleast 250l/3 door.
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  • Thanks for all the replies.
    Got another idea. Will ask the tenant if he is interested in a hire purchase scheme for the furniture. In this way, I can spend approx 1.25L for the furniture and white goods, and charge the tenant 5k per month for the same for 3 years.
    At the end of 3 years, the furniture is his, and he can walk away with it. This gives me 36*5 = 1.8L for an initial investment of 1.25L. He gets to use the all furniture from day one, even if his budget would not have allowed buying it outright.
    I also have a precedent for it. The modular kitchens in all flats have been bought by tenants for us and we have repaid them monthly (a sort of reverse hire purchase). That was easy to convince, since for some reason ladies are crazy about modular kitchens.
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  • Buying modular kitchen for free

    We had this idea when a tenant first asked us for a modular kitchen. I refused outright since this was way beyond my budget for customization, and was not agreed upon when the deal was struck.
    Generally my budget for free customizations is around 2k, just for goodwill purposes.
    Then at home had an idea. Next day called up the tenant and told him he can have the modular kitchen - if he pays for it. We then reimburse the amount to him through monthly payments of max 1k per month. If he leaves in between, he gets the remaining lumpsum amount along with return of deposit.

    This arrangement has worked in all the flats, and currently I am paying EMI to the tenants for a few modular kitchens :)
    A basic modular kitchen of 8 ft under the kitchen otta (with stainless steel racks and molded plywood doors) costs approx 25k. So I pay him back in 2 years.
    The layout of the drawers is decided by me, and the lady of the house gets to choose the colors, laminates, style of handles etc. Anything goes. One tenant has chosen a full bright red modular kitchen. Surprisingly it looks cool.
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  • Originally Posted by abeerbagul
    We had this idea when a tenant first asked us for a modular kitchen. I refused outright since this was way beyond my budget for customization, and was not agreed upon when the deal was struck.
    Generally my budget for free customizations is around 2k, just for goodwill purposes.
    Then at home had an idea. Next day called up the tenant and told him he can have the modular kitchen - if he pays for it. We then reimburse the amount to him through monthly payments of max 1k per month. If he leaves in between, he gets the remaining lumpsum amount along with return of deposit.

    This arrangement has worked in all the flats, and currently I am paying EMI to the tenants for a few modular kitchens :)
    A basic modular kitchen of 8 ft under the kitchen otta (with stainless steel racks and molded plywood doors) costs approx 25k. So I pay him back in 2 years.
    The layout of the drawers is decided by me, and the lady of the house gets to choose the colors, laminates, style of handles etc. Anything goes. One tenant has chosen a full bright red modular kitchen. Surprisingly it looks cool.


    You truly are a pro at this. You've almost convinced me to do my own "renting". Kudos to you!
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  • Decide your business model and stick to it

    In the rental side business, we have decided that our business model is "long term high value rentals".
    Note that I said high value, not high price. In rental market, we are still unable to translate the extra value we provide into extra rent. So currently we provide extra value free of cost, by charging only the average rent in that locality.
    What does "long term high value rental" mean?
    1. Long term:
    Offer a 5 year (59 month) lease. This gives the tenant a lot of stability to create his medium term family plans. This also reassures him that this is an investment property, and we are not going to sell any time soon.
    There is always the "one month notice" clause on either end should emergencies arise.
    2. High value:
    The tenant should feel that the rented house is as luxurious (or more) than what he can buy on his own. This is the opposite of what rentals are currently on the market (sad and depressing at best).
    Also, put features in the flat which make it housewife friendly and kid friendly. Though in India, mostly the husband pays the rent, flat is decided keeping the lady and kids in mind.
    P.S. The comment about husband paying rent is based on my past experience, and any change is welcomed.
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  • So currently there was an interesting business opportunity coming our way. Aircel wanted to put a cell tower on the terrace of the rowhouse where we have created two flats. Rent was 20k per month, 5 year contract. After lot of negotiation, they even agreed to a 6 month notice period, the first time a cell tower operator has agreed to a notice period.

    But when I told my tenants, both families opposed it strongly. They said they will move out the day the tower is put up. Now we wanted both tenants to stay, and also get the tower, so this not possible. In the end, we refused the tower, because our main business model was "high value rentals", which required "high quality tenants".
    Would the new tenants be as good as the current ones, especially with the negative sentiments surrounding cell towers on top of the building? I believe not. We might have got tenants who dont care where they live, as long as it is cheap. This was against the main business model.
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  • Originally Posted by abeerbagul
    So currently there was an interesting business opportunity coming our way. Aircel wanted to put a cell tower on the terrace of the rowhouse where we have created two flats. Rent was 20k per month, 5 year contract. After lot of negotiation, they even agreed to a 6 month notice period, the first time a cell tower operator has agreed to a notice period.

    But when I told my tenants, both families opposed it strongly. They said they will move out the day the tower is put up. Now we wanted both tenants to stay, and also get the tower, so this not possible. In the end, we refused the tower, because our main business model was "high value rentals", which required "high quality tenants".
    Would the new tenants be as good as the current ones, especially with the negative sentiments surrounding cell towers on top of the building? I believe not. We might have got tenants who dont care where they live, as long as it is cheap. This was against the main business model.


    20K rent for tower? R u saying that u r getting rent more than 20K from yr tenants?
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  • No. Two tenants pay 10k each. The tower rent would have doubled income from that property.
    But these tenants are cool. In Nigdi, 10K is pretty expensive for a 2 BHK. New tenants as good as these would not have rented the flat at all, whatever the rent, seeing the tower.
    I would be forced to lower the rent and accept any tenant who gives an offer. That might lead to damage in internal of the flat, which we dont want at all. Also, we want to keep our image of premium flats.
    Why to keep that, and how that will benefit me today, dont know. But am a strong believer in branding. A good brand name pays off eventually.
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  • Have u anytime thought about Service apartment option? What is the scopre for same in Pune?
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  • Know of service apartments in Aundh, Baner Road, Kalyaninagar, Koregaon Park, Deccan Gymkhana areas.
    As a flat owner, you give your flat on rent to an agent, who furnishes your flat and gives the hotel services. He has contacts in corporates and gets the contracts. You get much better rents - 1.5 to 2 times average rent.
    But the flat has to be in a posh area.
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