You may, as an Owner of a property in Bangalore, be amused at the title of this article.
To be frank with you, we were also surprised when we realised that data nearly points to this finding. We say nearly because it is valid only for a case where the bachelor tenant is well to do type who works for companies such a Microsoft, Flipkart, Goldman Sachs, Swiggy, Udaan, Deloitte etc
Let us understand This tenant
To understand more about this tenant type, we have to understand how they got in there. They withstood the rigours of the preparation needed to crack ”cushy” jobs such as those. These tenants would have likely passed out from very good colleges and are more likely from a disciplined middle class upbringing. It is also possible that they are more qualified than you!. Please do not get us wrong. We feel little sad when Owners needlessly reject them in the first place.
for the special case of above average properties
The goal is not to somehow convince you though, as we still tell you how to decide carefully and spot anomalies. You are still right when you imagine what comes to anyones mind about a bachelor tenant. But that is true of the average property and the average bachelor tenant. Your property may be a premium property or certainly above average, affordable to well placed people only. Readers of this blog post are more likely to either own such a property or afford such a property. And we are addressing exactly that special case here.
Standard of living of this tenant type
These tenants maintain a high standard of living, surpassing even their own colleagues who are married (family tenant)
- live one person per room
- require covered carpark for their bike or car
- depend of Ola/ Uber to commute
- mostly prefer gated communities with amenities, power back-up, security and maintenance staff
- hire a maid to keep the place clean and also a cook to stay healthy
- shop on Bigbasket, Amazon, exclusive brand showrooms for the best possible outcomes
- like to be trendy with latest fashion
- subscribe to Netflix, Amazon Prime, Hotstar to experience world class content
- have a premium smart phone to , uh .. brag about tech!
- subscribe to a regular car/ bike wash services in the apartment complex
- particular about keeping their living spaces clean, often more than the average family type of tenants.
- fly to travel when possible
- explore and experience the world and possibilities
- well informed and in sync with their global peers
The above points point to a standard of living, completely different from what is generally imagined about the ”bachelor tenant”.
When it not that rosy, let us compare between the tenant types
Chances of Pests:
15% for bachelor tenants vs 25% for family. Likely because of more cooking and not so good food storage and disposal practises.
Chances that the property is not kept well
15% for bachelors and 30% for families. This was rather surprising to us too. We realised this after analysing data for this type of bachelor tenants. We also observed that families tend to accumulate too many goods which often scattered here and there. They also tend to cook more food and have less time for clean up and maintenance of the flat. Please note that, in Bangalore, both husband and wife work and usually not focus so much on maintenance. We want Owners to realise this.
Chances of disturbance to neighbourhood
25% for bachelors and 15% for family tenants. Bachelors may play louder music and families may have noisy kids and watch tv shows longer.
Chances of Minor Damages to the property
10% for bachelor type and 15% for family type tenants. More damages occur due to more usage, lack of awareness of the usage and sometimes due to not being able to pay attention.
Chances of tenants vacating the property in 2 years
In the case of professionals from ITES sector: 40% for Bachelors. 80% for families. The higher chances can be attributed to dependancy on dynamic factors such as schools, spouse job location, medical facilities, promotion, addition of family members. Bachelors generally get replacements to them and are likely to not vacate the property early. Getting a good property to rent out is more difficult for them.
In the case of professionals from Non ITES sector: 60% for both. Note: Changes shown above are based on experience and are empirical.
Capacity to pay higher rent
Bachelor type of tenants, discussed above, generally can afford to pay higher rent. Usually it comes to about 10% more than a family tenant.
Some Quick Math on Net Rental advantage to the Owner
Suppose you own a 3bhk flat in Sobha Iris in Bellandur. We want to calculate the net return to you, in a duration of 3 years, after deducting cost of periodic maintenance and cost of repairs to get your flat in Spic&Span condition.
Assumptions on tenancy and repairs
Let us assume that each tenant stays 1.5 years during the 3 year period. Also assume that tenants bear cost of repairs that arise out of usage, such as geyser coils, tap valves, clean up of chimney, flush mechanism etc. Also assume that only bachelor tenants do not get deep cleaning done. Assume also that you spend Rs 10,000 on repairs in each cycle of 1.5 years. Assume that there is 5% rent escalation every time a Leave and License agreement (11 months) is renewed. We can not make assumptions on long term damages each tenant may do. But what is usually there to get damaged? Most rented properties are given without any antique collection, rare ceramic ware, hard to find bathroom fittings etc. We will still go ahead and assume that family tenants have kept it spic and span and so does not require any cleaning. Also assume that security deposit did not yield any interest rate or any other returns.
Two cases, case A and case B.
Case F: Flat rented at 38,000 plus maintenance by a family tenant. (These are real rates as of August, 2019). Owner collects 38000×11 months and in next cycle, collects 39900×7 months before tenant vacates. Also owner spends Rs10,000 on repairs only and not on deep cleaning. Then the next tenant will pay, say 40,000×11 and then 42000×7. And then Owner spends another 10,000 on repairs. Net Return is 1431300 – 20000 (repairs) = 14,11,300.
Case B: Flat rented at 41,000 plus maintenance by three bachelor tenants. (These are real rates as of August, 2019). Owner collects 41000×11 months and in next cycle, collects 43050×7 months before tenant vacates. Also owner spends Rs10,000 on repairs and Rs 6000 towards deep cleaning. Then then the next tenant will pay 43050×11 and 45202×7. And then Owner spends another 16000 on repairs and deep cleaning. Net Return is 15,83,314 – 32000 (repairs and 2 deep cleaning) = 15,51,314.
So the difference is at least INR 15,51,314 – 14,11,300 = 1,40,014, over a period of 3 years, and inspite of all calculations biased in favour of a family tenant type. We do not hold any thing against them. But we want to bring to light a misconception in the minds of so many owners who reject well qualified bachelor tenants without strong rationale.
You may be not sure. So we help you choose the right tenant
traits you may want to see in any tenant…
- A Warm person who is willing to see both the sides of the coin – in owners perspective as well as tenants’. Note – We also would like owners to be practical and to understand things from tenants perspective.
- Someone who is reasonably transparent and not wanting to hide relevant information
- Someone who is Well-read and traveled
- Someone who is sensitive with at least his own belongings
- Someone who is not overtly calculative
- Someone who is well put
- Someone who can afford your house
questions you may ask before you finalise a tenant?
- Do you agree and understand the spirit behind my terms and conditions?
- Do you mind if i ask for local references, of your manager or a family member or a friend?
- Where are you from, where did you study and work?
- Do you think my place is convenient for you to reach office, etc?
- Do you know how to use the different fixtures, furnishings in my house or do you need help in how to use them?
- Are you okay for the kind of deductions incase there is a damage or need of painting or repair?
- Which company do you work for and designation? What does your family do?
Summary
We have discussed about a particular type of bachelor tenant, who is well placed. We have seen why they may be a good tenant type. We have also discussed about what steps an owner needs to adopt to onboard a tenant optimally as well as how to place the right tenant.
All these can be done with relative ease, practically. If an owner is not in a position to do these himself, tenanted.in can help, even without any charges in some instances.
