Property Management Start-ups to the Rescue of NRI Investors

Periodic inspection of properties, assured care and rental assistance make companies such as Rentprop4u a hit with those away from home

If there is one reliable thing NRIs have always vouched for and continue to invest in, it is property back home in India. Bengaluru, Kochi, Mumbai, Ahmedabad and Delhi have been investment hotspots. However, the lucrative investment comes with strings attached - how does one know their tenant is good, that their house is not damaged in their absence, or what if the tenant calls them from across the seas to get a plumbing problem fixed?

Being so far off, and rarely visiting their hometowns, NRIs now are turning to property management companies to take care of the nitty-gritty of their treasured properties.

Rentprop4u, a Bengaluru-based realty start-up, says it has seen an almost 60 per cent increase in the number of enquiries over the past one year from NRIs in Australia, US, Canada, New Zealand and the Gulf. The company helps NRIs realise the full potential of their real estate investments. 

"Usually, NRI homeowners are worried about things like finding the right tenant quickly, showing the property, tenant vacation hassles and legal implications, rent variation, lack of tenant screening and house maintenance, dependency on brokers and inability to inspect the property during tenant stay," says Nagaraju M, CEO, Rentprop4u.

Nagaraju lays out the current details, very specific to NRIs - nearly 25 per cent of apartments in Bengaluru are bought by NRIs. In Kochi, it is about 40 per cent. Investment by NRIs in other cities such as MMR, NCR, Ahmedabad, Chennai and Dehradun varies between 5 to 10 per cent of the overall market sales.

According to the 2011 census of India, out of the 90 million residential census units, 11 million units were vacant; that is about 12 per cent of the total urban housing stock. And a lot of homeowners prefer to let their investments lie idle rather than face the trouble of letting them out.

Nagaraju speaks of how companies like his have now become popular with NRIs, because they offer 100 per cent property assistance - including rent assistance, rental agreements and payments, maintenance, quarterly inspection of properties with photographs taken and sent to owners. They also offer niche on-demand services such as furnishing and payment of property taxes.

Rentprop4u takes care of one other worry for NRIs - safety - through tenant screening and background verification as well. They do a police verification of the tenant through their legal team.

Established in 2016, Rentprop4u currently has 200-plus registered properties and more than 400 users. Be it a single property or a large portfolio, the company is so confident of its tenant placement services that it guarantees to let out the property in less than 30 days or start paying the rent to the owner within a month.

"We give them 15-20 per cent higher returns compared to brokers, so NRIs find our deals attractive. We can assure uninterrupted rent payments to property owners even when some of the properties are vacant for short periods," he adds.

HomeShikari to Focus on Rentals and Property Management Services

HomeShikari, a real estate startup of the TTK Group that was launched initially as a listing model, has now shifted its focus on home rentals and property management. 

The startup has several innovations to its credit including being the first to introduce physically verified listings to the market in 2012, to ensure accurate and reliable information that searchers could bank on. This eliminated unnecessary visits to properties that didn't match customers' needs.

"The real estate market was opaque and had a huge 'trust' deficit. We tried changing this by initially attempting a brokerage-free, advertising-free listing model, along with the right services to boot. But not everything went as per plan. Along the way, we learnt that mere information is not enough and that real estate requires hand-holding," said Sunder P, Director, HomeShikari.

Unlike in the US, where one can create a data-based predictive pricing model, here, it is not possible because the true value of each transaction never gets reported. Given this situation, many startups that have been attempting to solve this problem merely with technology and no services, have met with little success even after burning through loads of money.

So, HomeShikari that started off as an advertisement-free, brokerage-free model, is now entering into  brokerage services'.

Explaining the rationale behind this, Sunder said, "We did start off in 2012 thinking that the DIY (Do-it-Yourself) model is the right one for the market once you provide information. However, over time, we realized that it was still a game of chance and it didn't remove the hassle out of handling a real estate transaction for the customer.

Information was improving but the last mile services were not. So, we were forced to rethink this aspect."

He further added, "We decided to create a brokerage service for home owners because we found that most required assistance to conclude a transaction or didn't have the time to deal with it. And where services can save time and effort for consumers while bridging the trust deficit, there is a clear value proposition."

Over the last year, HomeShikari has been experimenting with the brokerage model on its home turf, Bangalore. It has seen an encouraging 30+% success rate on brokerage and this figure is expected to improve with time and better focus. It has also served more than 2500 clients on various real estate services in the last year and that number includes a significant proportion from the NRI segment. After getting the pilot right, it is now expanding its operations to Chennai and Hyderabad.

The firm has an established presence in the NRI segment through its service, YourManInIndia since the year 2000. YourManInIndia has successfully helped NRIs manage rentals, monitor vacant properties, handle paperwork and end-to-end transaction assistance, while they were thousands of miles away. "Our domain expertise and experience in making things happen, not just providing information, was the key to our success," said Sunder P.

The firm intends to leverage technology to provide every kind of transaction-enabling service that may be required by a homeowner during the lifecycle of a property asset. And unlike the typical broker next door, customers can rest assured that HomeShikari will always represent only one party in any transaction and will provide unbiased advice.

And most importantly, the rental brokerage fee for homeowners is disruptively priced at 50% of a month's rent, while it will remain brokerage free for searchers.