Planning to rent a house? 10 things you should keep in mind

Planning to buy a car? Consider this too

Home is a place we grew up from a child to an adult. Home is a place where we build a family and raise children. The home is a feeling of belonging which begins at finding a house, creating our comfort corner.
Lucky are those people who are privileged to stay at Parent’s or has earned enough to buy on their own. For those who are yet to find a own house, this post is to help you get the next best option – ‘Renting a house – and make it a home’. Renting a house is not an easy task, a dream home is not easy or may not be pocket friendly or commute friendly. It takes amount of research, negotiations and hard work. 🙂 Here I am listing the critical points which will help you find the best home. I am taking Mumbai as a case for this, as I call the city my home.



1. Broker or no-broker? 
Mumbai is a huge metro city, finding a rental home without a professional help is difficult. You may consider taking brokers list from neighbourhoods. The online help at JustDial listings or even property websites like 99 acres, Magic Bricks, housing.com etc is also a great help as they also provide the sample pictures of the property along with the broker coordinates. Brokers generally take down the criteria from you as in budget, location and property and help you with options. Incase you dislike third-party involvement, there are websites like nobrokers.com, purely listed by owners can get you property with no brokerage. However, in these cases, assistance in registration, background of the owners etc is difficult. 
2. Location and neighbourhood – the list of a preferred location can be long with neighborhood, market, hospital, railway station, bus stand – A big city comes with a few advantages as well as disadvantages.  According to me, commute time to workplace should be the first criteria while searching a house, a smart planning will help save you cost as well as time. 
3. Rental amount – Rent of a house will depend on multiple factors like age of the property, locality, society, proximity to local facilities like hospitals, schools, multiplexes, shopping malls etc. You need to decide a rent budget basis your net income, saving goals and other liabiities (like ongoing personal loans, car loans etc.) Ideally a home expenses like rental, and bills (electricity, water, telephone bills) should not exceed one-third of net monthly income. If you can keep it lower than that, would be better for you. Also, pre-decide the hike in rental with home-owner if you are planning to make multi-year contract. 
4. Home owner – The house you are planning to make your home is somebody else’s property, the legal contract of the house will be between renter so knowing the owner in person would be a good idea. Have a conversation with your requirement to agree upon a mutually convenient contract.
5. Documentation requirement – As rental document is a legal contract, it follows procedure such as police varification, you would need to provide copy of Adhaar card, Pan Card, Passport size photograph, cancelled cheque leaf etc. Ensure the documents are attested with date and purpose (mention – for rental agreement). 
6. Brokerage – In mumbai, the brokerage is generally a month’s rent, don’t agree for more even if you doing multi-year agreement. Broker’s primary job is to list down your various criteria and take you for online and physical visit to the properties. The broker should be able to provide you with registration assistance and helping with a conversation with the owner. You are not liable to pay any fee untill the broker is able to complete the deal. Many a times if a broker doesnot find a suitable option in his designated geography, he/she may reach out to other brokers who may have properties which meets your demand, in these cases they often ask and negotiate for bigger brokerage, you shouldnt agree to this unreasonable demand.
7. Rental Agreement – This is the legal document for you and your home-owner. You need to check the document carefully to ensure your interest is protected. Often times there is a clause of minimum lock-in period, which means incase either party wants to end the contract may have to shell out a pre-decided amount to the other party. Check the document, clarify with the owner, broker as well as the registration official on any doubts. Keep a copy of the agreement safely. It will be needed for many official use including dealing legally with the owner if need be. 
8. Amenities – There are some basic and important requirements of every individual in a home. Figure out if you would like to use pre-owned amenities or you would like to rent a house which has some basic fixtures. Basic amenities would include Gyesers, exhaust fans, ceiling fans, electricity connection, water connection, cooking gas connection etc. You should keep these factors in mind while chosing the house and negotiating the rental.
9. Furniture – This is the second most aspect of a home after the basic ameninites. If you pre-own furniture, you can be sorted with a un-furnished house, but depending on requirement and your current possessions you may look for semi-furnished or fully furnished hones. The semi-furnished home may come with a bed, modular kitchen. A fully furnished house may include a sofa, dinning set, TV cabinets etc.

For furnitures, you also have many options –  buying brand new or second hand from platform like OLX, Quikr. You have additional option of renting your furniture from websites like Fabrento, Rentomojo, Pepperfry etc., they also provide packages for bed room, dining room, living room etc. The renting and owning is a personal choice, may be will write another post on that!
10. Maintainance – The rented flat/ apartment should be properly registered with the building/housing society.  Society maintenance cost is home-owner’s responsibility. But you need to ensure you get a spik n span house with colour, window mesh, pest control and furnitures and other amenities repaired and you will be expected to return the house key in the same manner when you leave the house.

Make checklist as per your requirement to help you make the shifting a smooth affair.
Advantage of renting a home – my passion is calculation. With a basic reseach I found the concept of renting is much convinient on pocket than buying a new property. Renting is a super cool option unless you have deep pocket and have the capacity to buy a house with existing savings without going for an EMI. Rent saves money, you have a option of staying in the house as long as contract permits, stay in the locality you want in about 1/4th of a owned house (EMI+maintanance). India is obsessed with owning house, wouldnt want to debate too much here. But do some google and sone excelsheet, you will understand my viewpoint. Hope this article will be useful fir renting a home in mumbai. See you soon with my next article! 
Happy saving, Happy Investing and Happy Renting!

Direct Plan Vs. Regular plans which mutual fund plan to buy?

Direct plan or Regular plan
Amidst the volatile markets and global economic conditions, Indian #mutual fund industry has seen a steady upsurge in investments in last decade. Globally, India has established its position as an investment destination. Though Mutual Funds industry existed in India for last 30 years, its only last decade that individual investors warmed upto this investment tool.
SEBI, the regulatory authorities for equity markets in India has played a major role revamping the mutual fund industry with series of reforms and making mutual funds a transparent, low cost and high yielding instrument for individual investors. I can write a full article on the reformative steps of SEBI for the mutual fund industry which irks the players but it has only helped retail investors in gaining confidence on the investment tool.
But, in this article I would like to focus on the specific reform of splitting schemes in regular and direct plans. The move not only made a lot of news, it opened a new era low cost investing where equity direct plans cost up to 0.5 -1% less than the regular funds and 0.2% on debt funds.
What is a #direct plan and regular plan
Beginning Jan 1, 2013, all the #mutual funds mandatorily split its existing and new schemes into two with different NAVs (Unit price). The funds, when sold by the distributors were put into ‘Regular’ category, which included the upfront/trailing fee and transaction costs for the service of the broker/distributor. This is aimed at rationalizing broker’s cost for rendering his service.
‘Direct’ category for each scheme was created for investors who don’t take service of any distributor/advisor for mutual funds investment and buys from mutual fund office/online/ CAMS/KARVY App. They don’t need to pay for the extra upfront/trailing charges for the services.
Direct Vs. Regular plan
Though over time process of investing in mutual fund has become easy, but selecting the right products requires planning. Every mutual fund scheme has an investment objective and style. It is investor’s prerogative to choose right schemes based on his financial goals. However, brokers are often tempted by the upfront or trailing fee structure while suggesting funds. 
The distributors and advisors played an important role here in choosing right product mix for their clients. However, an informed investor need not require assistance on investing. Hence, SEBI proposed separate NAV for Direct funds deducting the distributor related costs.     

  
Illustration on how Rs. 10,000 grew from Jan 1, 2013 to Dc 2016 in direct Vis-à-vis regular plans
 Schemes – Largecap equity mutual fund                                               
Birla Sunlife Frontline Equity – Growth
Percentage return in 3 years
Total return
Direct plan
20.11
17624
Growth Plan
19
17014
ICICI Value Discovery  Midcap-smallcap fund
ICICI Pru Value Discovery – Growth
Percentage return in 3 years
Total return
Direct plan
18.23
17278
Growth Plan
17.19
16736
HDFC Income Fund – Debt oriented
HDFC Income Fund
Percentage return in 3 years
Total return
Direct plan
12.62
14694
Growth Plan
11.58
14188
Who should buy direct plan?
An informed investor should choose direct plans, as over 5 years the direct plans can give about 3-4 % extra return.
Alternative options?
If you are not financially savvy, take professional help on financial planning from certified advisors for a fee, and then buy mutual funds direct plans. But if you still require assistance in buying and managing your investments, you should buy with help of broker/distributor and choose ‘Regular’ plans. 
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