Article summary. Some problems you may face with your property in India when you are stuck overseas:
- Rent reduction – Although there are no mandatory announcements or mandates by the government – many tenants are making requests for rent reduction in major metropolitan cities like Bangalore.
- Deferring rent or giving a discount to your tenants.
- Managing the property during a full lockdown.
- Property inspection and maintenance.
- Communication between the owner, tenants, and repairmen/handymen.
- Keeping up with changes in local policies, timelines, and agreements.
- Finding tenants to reduce vacancy.
The Covid Era
With a total global toll of 41.3M cases of Covid-19, several countries were taken by surprise by the rate at which the virus spread worldwide. With several countries closing borders, making changes in immigration and visa policies many people found themselves stuck and unsure in the uncertainty of the current times.
With a rise in instability and vulnerability of the global economy, job security and governmental policy changing, real estate has become a popular investment option for NRIs.
The real estate sector has seen an interesting fall and rise in the past few months with the government introducing certain relaxations [Measures taken by the government to provide relief to the Indian real estate sector] to help bring some calm in the chaos.
The various new measures taken by the government has created a silver lining for those overseas [A Silver Lining for NRIs to invest in property during Covid-19] and makes this a good time to consider investing in real estate.
If you are someone who is looking to explore investments in real estate, we have a network of clients and potential properties you can consider investing in.
However, if you have already invested in property in India, during times like this, it becomes a major challenge when you are in a different country or city.
You not only will have to deal with the changing times in the country of your residence, but you will also have to pay close attention to what are the market and sector changes happening in India. With work from home, new responsibilities and stress; handling property or several properties overseas poses a serious challenge for many.
While you may have left your property in the hands of a trustworthy relative, you have to bear in mind that they may not have the bandwidth to look after your property at times like this, as they may be juggling their own lives around Covid-19.
A property management firm takes away all management responsibilities of your property and helps you keep up with changing circumstances [Managing Your Property in India Amidst a Pandemic], ensures you are in the loop, informed about all the changes with respect to market trends and changes in local policy.
Things to keep in mind as a property owner in this time of crisis:
Although there are no mandatory announcements or mandates by the government – many tenants are making requests for rent reduction in major metropolitan cities like Bangalore, where the rent in prime locations can be a hefty bill to pay with pay cuts and salary reductions.
As a property owner, you will need someone on-ground having negotiation discussions with the tenant to meet halfway – a place where you may be able to help them and also a place where you are not at a total loss.
A property manager will take all necessary safety precautions to visit your property in escalated cases, or close negotiations over a call. Which you may not have the time to do, being in a different time zone.
As there is no standard rent reduction – landlords’ and tenants’ circumstances vary for each location and property, your property manager will ensure each scenario is attended to individually.
Rent deferment vs discount
This needs to be a case by case business decision. As you don’t want to end up losing out on the potential of the investment yield. A property manager will bring forward a possible and feasible plan of actions that you can decide to make the best out of your investment on a stormy day.
Property should be regarded as an essential service. Though a tenant may need to leave suddenly due to a lockdown or an elaborated WFH situation, you still need a plan in place to keep your property ready to be on the market to reduce vacancy time.
Communication with your tenant and communication about the status/state of the property are both essential. Being an NRI, you will be functioning and busy at different times of the day vs someone in India. Uncertain times make people anxious and a tenant may need to communicate certain emergencies like vacating the place or maybe a neighbourhood covid breakout to you as the owner.
As the owner of the property, you will also find it important to know immediately if you tenant needs to vacate the property:
- Why are they leaving?
- Can you retain them by lower rent or the deposit?
- Is there a clause of escalation in the agreement they are anxious about?
A property management firm will take care of all your communications channels and keep you updated by an app, which is accessible at the tip of your fingers.
Covid or no Covid, routine inspections of the property are a must. Although the situation in March, April and May were dire, since June, the unlock began and people have a little more restricted freedom to move around the city or within the state.
A property manager [Top 3 Qualities To Look For In a great Property Manager] who will be assigned to manage your property will schedule an inspection based on the locality and circumstances or will at least reach out to tenants to follow up on any urgent issues like a tap that may have started leaking during the lockdown, or a window that broke.
Such things may be small damages that happen to a property, but in the long run may cost you a fair amount to make the property good as new.
Changes in local policies and timelines
The government has taken various measures to help sustain the real estate sector, from Reduction in the Repo rates to deferment of home loan EMI’s. It is essential to keep up with these changing trends and policies so you do not end up defaulting or losing out on any policy that may benefit you and give you some space to breathe in tough circumstances.
Being a property management company, we handle all government related documentation for you and have experts who stay updated on all policy changes to ensure your property gets the attention it needs when it comes to paperwork.
There has been a surge in vacant properties in many metropolis cities, however, cities like Hyderabad and Bangalore are welcoming back people who had left to be with families for the two-month lock-down.
If your property has been vacant, as your property manager, our goal will be to fill that vacancy at the earliest. Your property manager will digitally market your property on all the right platforms and be prompt to tend to queries that a potential tenant may have immediately, ensuring higher chances of a deal.
This takes away the tedious burden of answering and replying various potential tenant queries for you.
Changes in Agreements
As per your agreement, a price escalation or change in some other terms and conditions may be applicable as per the when the agreement was signed, however, a tenant may not be in a position to live up to certain terms.
It is important for you to revisit the agreement as many tenants, now, do not want to get into long term commitments as per Covid times.
A property management firm will help you evaluate and draft appropriate agreement terms that will essentially fulfil their overall agenda of the upkeep of your property and safety of the property legally.
Every situation is now unique to each individual and while a property management firm will assist you and make your investment as worthwhile as it can be in tough times, it is important to keep in mind the hardships a tenant may face.
We believe in fair requests based on verification of circumstances. For example, if a tenant is requesting a rent reduction – either an employee severance letter can be requested.
We Are Here For You
In trying times, it’s good to have someone to share your responsibilities with, we happen to be experts in handling some responsibilities – so reach out to us and we will ensure your property is taken care of through all times and circumstances.