India » Rental Market

Property and real estate rental sector in India is the second most developing sector in India after IT.  The innovations in the field of IT, technology, services industry and relaxation of the laws regarding foreign investment in the country are attracting foreign investors in the country. Influx of foreign companies and individuals, in return is causing a demand for housing, thus giving a boost to India’s Rental Market.

India’s Rental Market is vast and expanding in almost all the major segments such as retail, residential and commercial. Metropolitan cities like Delhi, Mumbai, Chennai and Kolkata are in great demand and a significant rise in rental prices has been observed during the last couple of years. Tourism in India has also given a boost to the rental market of hill stations and beach resorts, among which Goa is the most sought after tourist spot. According to several recent surveys Mumbai is believed to be the most expensive city in terms of housing and rent.

At the moment, Indian Rental Market is worth $50 billion and it is forecasted to grow by 25% per year. Major growth has been seen in the commercial property sector, where industry giants are renting large commercial properties for the purpose of expanding their business in India. Indian Rental Market is flourishing under the new Indian laws regarding the foreign investment in the country.

Indian Rental Market is not only thriving in the commercial sector but a positive uplift has been seen in the residential rental property. Growing economy has raised the living standard of Indian middle class, who are willing to pay more rent. There is a major portion of Indian population, who is willing to invest in real estate to rent, to generate a large portion of their income.

Rental rates in India varies from place to place, metropolitan areas are much expensive than the other areas. Mumbai is the most expensive area. In order to rent in Mumbai, mostly the “Pugree system” is followed. That means the new tenants pays one month’s rent in advance as a security to landlord. On leaving the new tenant pays this money to the old one.

There are three types of contract for renting a property;

• Rental
• Lease
• Leave and License

In case you are a foreigner, certain legal procedures will be carried out by the landlord. The landlord will have to take permission and register the tenant at the local police station.  Stamp duty and registering costs are most often paid by the landlord.