Concept Of Zero Rental Enters Into Mumbai suburbs

Zero rentals for residential flat is fast gaining popularity in the extended suburbs of Vasai-Virar. But there’s a catch. Pay a heavy deposit, which is returned when the leave-and-licence agreement comes to an end, provided the house is returned to the owner in its original condition.

Owners are encouraging zero rentals in return for “heavy deposits” to the tune of Rs 2 to Rs 5 lakh so that they get back their flats in proper condition when the tenants leave.

A proper leave-and-licence agreement is drawn up and both the owner and the tenant do not need to contact each other until the agreement ends.

People looking for accommodation are increasingly getting attracted to the zero rent scheme. Especially newly-weds and those with transferable jobs are opting for the zero rent schemes.

Real estate agents say that while tenants find the zero rental scheme attractive, they also take good care of the flats to avoid deductions in the deposit amount. Flat owners also find it more lucrative to reinvest the lump sum deposit than collect a monthly rent, which is usually spent immediately.

3 Comments

  1. Thomas George
    Posted May 5, 2008 at 10:24 am | Permalink

    What is the the ratio of the deposit to the property value? For example: what would the zero rental deposit for a house valued at 50 lakhs?

  2. Posted May 7, 2008 at 12:37 am | Permalink

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  3. Posted May 7, 2008 at 11:39 am | Permalink

    I was trying to make sense of the concept of zero rentals. Suppose a person buys a property for 50 lakhs and then leases out on zero rental for 10 lakhs (20% of value), is he not almost depending on appreciation of property for returns?

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