A Stress Free Guide on How to Rent An Apartment in Mumbai? – Part 2 of 3
4. Looking at Apartments
After you decide on your budget, the locations that fit within your budget and an awesome real estate broker, you are finally ready to check out the apartments. This is very tricky and a bit of a painful process. Unlike most global cities, Mumbai has NO apartment complexes that are solely for rental purposes. This is something which is RIDICULOUS and ATROCIOUS for a city that prides itself as the financial capital of India. It is also a great opportunity for some smart entrepreneur with oodles of money to invest in. (I will gladly give my expertise and services to whoever is willing to do it, since I am currently financially incapable of such a heavy investment. Anyways, I digress, so let’s get back to the point.)
The apartments that are usually available are owned by private individuals and property investors. They individually rent their properties. It is an ancillary source of income for some while for others, it is their primary source of income. You might wonder “What is so tricky about this?”. Well the tricky part is that there are only so many apartments out there in the market. Several times there is a repetition of the same apartment. You will probably land up seeing the same apartment 2-3 times through various other brokers. This is a bit difficult to understand for international immigrants since they are used to living in an organized world. Mumbai is an unorganized world where chaos is part of life, which somehow produces sanity. (I know it’s an oxymoron, but so is Mumbai. Anyways, I digress again) This tricky little part is something that you have to experience on your own to realize and then maybe you might just have a giggle.
Now the painful part. There is an international term used sarcastically by a lot of (NRIs) Non Resident Indians – “I.S.T.” – which stands for “Indian Standard Time”. This basically means that you have the Right to be Late. Several times, you might be given a time for appointment, say 4 PM. The person who is supposed to be there at 4 PM will come by 4:30 PM. This practice of coming late is a very common habit within the Broker community in Mumbai. They will actually wait for you to come to the rendezvous point and then they will leave their happy place to come down and see you. Until then, they will be doing their merry little things as and when they please to. No matter how many times you might call to confirm and re-confirm the appointment, this is bound to happen several times over. A solution for this is to have tons of patience. After all the roaming around in the heat, dust and sweat, you will probably finalize on an apartment. My suggestion here would be to have couple of backup choices also (if you are lucky enough) just in case your first choice does not work out for whatever reasons.
5. Negotiating the Price and Terms
Once you finalize on a flat, your negotiations begin. In Mumbai or India in general, there is always a margin for negotiations. On extremely rare cases would you find no negotiations. The property owner always adds a few percentage margin for negotiations. The rent is negotiable and so is the security deposit. Overseas in the USA for example, deposit is normally one month’s rent or based on your credit score, it could be more or less. The norm for security deposit is 6 months rent, which is refundable at the end of the rent period. In residential properties you can negotiate an average of 10% of the rent, which is mostly rounded up to the nearest thousand.
There is an annual increment or escalation in the rent. It ranges from 5% to 10%. Obviously 5% is beneficial to the renter and 10% to the landlord. There is normally very little negotiability in this matter.Negotiability on residential properties also depends on the client profile. If the renter is working for a well known company, bank, M.N.C., consulate, etc. then your negotiability improves. In case the company is willing to do the lease agreement directly under it’s corporate name then there is opportunity to negotiate and dictate some terms and conditions.
Landlords in Mumbai prefer company lease or a reputed individual since they feel secured about their property. It is important to most landlords all over the world to know that their property will be maintained well and the general experience is that if it’s under a company name, or if it’s an individual on a higher designation then they are secured. Anyways, this improves the renters negotiability.
6. Paying a Token Amount
Once all the negotiations are done and things are verbally decided then there is a token amount that is given to the owner to seal the deal. This is pretty much a standard all over the world. It is good faith money from the renters side to the landlord to take the property off the market. Normally, the token amount is approximately 5% to 10% of the agreed upon deposit amount. This token amount at times is refundable and sometimes is not refundable. It is extremely necessary to clear out things in advance so that there is no confusion at the later date. One confusion could be getting the OK from the co-operative society. This is especially true if you are a single/unmarried individual (a bachelor or spinster) or worse a student. However, that would require a separate blog article of it’s own.