Landlords Build Riches On EMIs

Person owning flats in Mumbai are taken as privileged one. The owner-tenant divide is almost as pronounced as the rich-poor divide.
Mr. Shishir Baijal, managing director of Kshitij, the realty fund of Future Group, earns a big amount, but still he is a tenant. He has no home of his own. He stays in 3500 square feet flat for which he has to pay a staggering rent of Rs4 lakh a month.

His landlord has purchased a luxury juhu flat on home loan. Initially, he found EMI very scary. Today’s scenario is that he can pay his EMI, Rs. 1.5 lakh approx, from the rent he earns and along with that he is getting almost Rs. 2.5 lakh as rent.

Mr. Chetan Narain, CEO of Narains Corp and president of the India Institute of Real Estate, is not at all surprised by the steep rise in rentals. He says,“With high rise in capital values, the rental rise was only expected”. Further he added,“In premium locations like Napean Sea Road, Bandra, Juhu, Andheri and Powai, the rise has been as much as 80 to 100% from the 2006-end rentals.”

Mr. Pranay Vakil, chairman of Knight Frank global real estate consultants, says, “Rentals are always 5 to 6 per cent of the market value of the property. So, with the steep rise in property prices, it is not surprising that rentals have shot up”.

One Comment

  1. Arjun
    Posted March 20, 2009 at 6:53 am | Permalink

    That’s so unbelievable

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