For a majority of Indians born till the late 70s, renting a house could be very disparaging. Not being able to afford a house, build the 'home of your dreams', the tangible representation of your existence etc. can mean a life spent without achieving anything and in chronic financial insecurity. But ask a millennial the same question and the answer might be -'well as long as the AC works and the landlord is not interfering, I don't really mind.'
Nearly 40 per cent population of urban India in top 8 metro cities lives on rent, with the demand for quality rental properties increasing every year. Considering the demand, the government has planned to open 2 crore more houses over and above the existing 1 crore vacant houses available all over India currently. As a generation, millennials have a very different take on homeownership than their parents or grandparents. Youngsters, as well as working couples have evolving priorities that have contributed significantly to the growth of the home rentals industry - with annual rents paid being $32 billion in the top cities. However, one of the most important aspects that distinguish the current generation from its previous one is that they are focused on utility and experiences rather than ownership. Thus, a rented home located very near to one's workplace with ample connectivity and stable connection is much preferable to a young professional than an owned house located miles away.
The cost factor also plays a crucial role while opting for rental living. Home ownership is 4X costly (Home Loan Vs Rent) than rental solutions, and for the current generation, blocking significant amount of funds for home EMI payment is impractical to say the least. Around 20 million families living in urban cities pay Rs 1,00,000 per year on average, generating $3 billion in brokerage avenues alone!
However, one of the biggest problems that plague the home-seeking experience is the utter fragmentation, miscommunication and complete lack of technology in the industry. A home-seeker on an average takes 12 days visiting 14 houses, after going through the hassles of interacting with tens of brokers. The phrase 'house-hunting' never rang so true!
Like everything else, the millennial consumer also wants to enjoy a streamlined, tech-driven rental home-seeking experience. Indian millennials are wired to go the online way for home renting, but the online classifieds players have been a disappointment. This is partly due to a faulty revenue structure which works on commissions received from those who listed the properties. Thus, every subsequent visit from the home-seeker brings more revenue; hence the entire broker-classified structure is incentivised with a failed query.
This is where new age end-to-end tech focused platforms are coming in. By providing a full stack of services, from creation and maintenance of an inventory data base to identifying home seekers and matching properties with the best suited tenants, these platforms are altering the conventional rental real-estate industry to make it more suited to the millennials' ways.
Apart from a pressing demand for greater convenience, the recent introduction of RERA and increased regulation has further made it mandatory for the rental real-estate domain to be re-aligned to meet the needs and preferences of the modern consumer. Stakeholders need to shake off their complacency and adapt to the demands of the young modern customer. You either do that or risk getting perished.
The writer is CEO & Co-founder at FastFox.com