How A Tenant Adds Value To Your Property
Rakesh Mohan, 63, is among the lucky few who had purchased a property in Delhi's Mayur Vihar when the locality had not seen much development. He had bought a DDA-built (Delhi Development Authority) flat in the locality for Rs 8 lakh in the late 1970s. The retired LIC officer is now desperate to sell the house but he is unable to find a buyer ready to pay him Rs 1.2 crore for his top-floor flat. He has a bigger family now, which requires more space. His family owns multiple cars, which are parked on the road and for which he often gets into an argument with his neighbours. He is getting old and an elevator would have been of help, something his building does not have. Despite all the little troubles the old man faces each day, he is in no mood to reduce the price he has quoted for his property. He is waiting for the day when he would get the right value of his property.
We have to agree that the value of his property went up by leaps and bounds since he purchased it decades ago. The area underwent a remarkable change during this time. Property prices spiked in the area when it got a Metro connectivity in 2009. But, what else might have turned his old property into a luxury not many can afford, and which was originally meant for the low-income group (LIG)?
“I spent a fair amount of money to make certain changes in the store area on the terrace. For years, I earn a monthly rent of Rs 13,000 from that alone. Why would I let go of my precious home at a rate not befitting its true worth?“ says Mohan.
Now, who could be willing to pay that kind of money for a barsati? This is a term often used to describe tiny dwelling units built at the terrace of a house. These are often built and rented illegally. “My current tenant's office is in Connaught Place, which is only 15 minutes away via Metro. The single woman is only too happy to be here. Whatever extra money she might be paying me is saved in transportation. Never has she raised any objection to a yearly raise of 10 per cent over the rent amount,” adds Mohan.
“I avoid renting to students, who create too much of noise and often default on payments. Renting to outsiders who are in the city for their jobs is a safe bet. They pay in time, party less and are not very stingy about money.”
This makes it clear it is not just the demand for rental units that job seekers generate for a major city; they also add to the value of the property. Had it not been for his generous tenants Mohan would not be having such high hopes with his decades-old property.
“It might be one of the outsiders who would one day pay me the true price for my property,” Mohan concludes.