With interest rates rising, developers are throwing a new bait at NRIs and individuals looking for a second home as investment. Cash-crunched developers are offering "assured" rentals in the range of 6-12% of the property value annually plus free maintenance.
The trend was earlier limited to commercial projects and small developers is now increasingly being used even by bigger ones for residential complexes. Developers in the western part of the city are offering a different kind of deal than the builders in the north.
US-based writer Sharmishta Chakravorty is one interested buyer. Her requirement: "We come to India once in two years. And that too for a couple of weeks. We are not comfortable staying with relatives and so want to buy a house. But our dilemma is its upkeep and finding tenants," she says.
This is where realtors such as Royal Palms Estate step in. At the time of signing the contract, the company issues quarterly post-dated cheques to buyers. During the tenure of the contract, the possession of the house remains with Royal Palms Estates and the company in turn rents or leases it to its corporate clients.
"The property is priced in the range of Rs 4,000-6,000 per sq ft. After two years, the buyer has the option of renegotiating the contract," says Dilawar Nensey, joint managing director, Royal Palms Estates.
Disha Direct, which has developed a seaside resort on the outskirts of Mumbai, offers 6% of the property value annually as rent to buyers. "Our villas cost Rs 60 lakh. Besides guaranteed rentals we also take care of the maintenance," says Santosh Naik, the company's managing director. Disha's villas are rented out to weekend visitors. The company also allows the buyer four weeks of free stay during the tenure of the contract, which is for a period of 10 years. If the buyer wants to cancel the contract he has to give a month's notice.
In north India, property developers offer another form of guaranteed returns. Investors are asked to become partners in projects. As an investor, you are required to put in a certain sum as down payment and the developer usually offers a return of 20-30%. After the project is complete, the builder offers you a choice of aplot of land or a unit in the project or your money back. In some cases, the builder also hedges his bets in case the project actually does well by only promising a preferable allotment when the project is complet