Affordable Housing for the Middle Class

“What does affordable housing in Gurgaon, with its high-lifestyle, urbanization, and posh-societies look like?” You may think, given that Residential Flats varies in its meaning for different demographic profiles. Especially in the Indian real estate market, affordable housing has a connotation for housing for the lower income group (LIG), by which they too can enjoy a comfortable living and security. With the incumbent government’s focus on this section and more on the affordable housing, it seems like the real estate sector has been able to get the boost that it had been waiting for of late.

However, there is an important trend that needs to be taken note of before the government claims that its affordable housing project is a success. The term affordable housing, in different contexts, also has a local meaning. According to this, affordable housing includes housing options for a segment of population that can become potential home buyers in a city. If we take this definition into consideration, there is a sizeable population in every city, which although it will not identify with or fall under the LIG, is equally incapable of allotting a large budget for buying homes. It is not only sensitive and cost-wary but is looking forward to finding a house of a decent budget-size within the realms of the city. A typical example is of the residential flats in Gurgaon, which although are well-furnished, but do not still fall under the budget for the middle class.

When we take this population’s demands and needs a little more seriously, we find that there is a dearth of properties in good locations within the city, which buyers can afford. These buyers often have a budget of INR 30-40 lakhs, but more cities including Delhi NCR have a deficit in properties which match this budget range. Usually properties which are around INR 20 lakhs are still on the outskirts lacking good transportation and other facilities required by the urban middle class. This means that there is indeed a requirement for more housing under the affordable housing section, where different demographic profiles can find properties for themselves.

There is an urgent need for developers to come up with budget housing projects in the larger cities. As modern India moves towards development and rising aspirations, affordable housing and the security that comes with it, is increasing. This appears to be a very high opportunity for developers who can count on a boost in the real estate industry. More absorption of the housing projects in the urban cities is also a strong indicator of the socio-economic growth in the country, thereby projecting a positive image. While the demand is strong and only increasing, there are a lot of policy-level changes that need to be introduced.

Not only will the affordable housing for the middle class prove to be a sustainable business model for the future, it will also allow more cities to come up to ranks. More affordable housing projects will assure developers that they do not struggle with inflation or even setbacks in the economy. Another trend that one needs to channelize is that more real estate investors are now eyeing budget and affordable housing projects. Where luxury homes and premium homes find it hard to make it through a rough economy, affordable housing is still on the move. The healthy demand in addition with more money coming in steady from investors means a healthy micro-economy. It is now time for builders and the government to give this proposition a try, ensuring that the overall development of the country happens throughout.

Tips for New Residential Construction

The process to entitle lots can take more than five years and is expensive. The cost of parcel maps for five lots or less is $100,000. Tract maps for more than five lots can cost more than $500,000. The number of lots and the potential size are determined by biology, health-department regulations, slope, and the zoning and general plan. Included in the cost are engineering, processing, and regulatory fees and various reports and studies.

Reports and studies include conditions of approval costs, storm-water treatment, anthropology and archeology, soils, biology, noise, and traffic. When a map is approved and recorded, there are additional fees that include, but are not limited to the following:
• Potential greenhouse gas studies
• Retention and drainage basins
• On- and off-site mitigation land
• School fees
• Parks and recreation fees
• Physical secondary access
• Fire fees
• Annual bonding fees.

Politics comes into play when obtaining the required approvals from county boards, city councils, and planning commissions. The level of public opposition or support affects hearings completion. They can be completed in as little as four months, or take years and cost over a million dollars. Property owners have three courses of action to take into consideration.

1. Entitlement and sale of the property ‘as is’ – This option brings the lowest price, but costs the least and requires the shortest time for property disposal. Under rare circumstances, the land is worth more when it is unentitled.
2. Enter into a long-term agreement – The agreement is made with a home builder who incurs the expenses of processing a tract map. This option is the most utilized. The process could take up to five years. The buyer is required to release nonrefundable deposits periodically to the seller after approving their contingencies. Escrow closing typically occurs after tentative or final map approval.
3. The owner incurs the entitlement costs – Much of the process is like option two. The difference is the owner has full control of the mapping process and bears all expenses.

The ramifications of each choice should be weighed carefully before making a decision. Owners, who have chosen not to seek advice, have made the decision to process a map and found out later the number of lots was not financially feasible. A competent engineer can determine the optimal number of lots that can be obtained and approved. Smart growth design principals call for buildings with a variety of materials, texture, and color and individuality; well-defined open space; a building and street relationship; mixed uses; and high-density development. Contractors, who specialize in residential subdivisions, can give realistic cost estimations.

The process of entitling residential property to higher densities is costly, complex, and cumbersome. Many factors must be taken into consideration. The leading concerns that communities have about increased density are the quality of life and increased costs.

There is a need for new affordable housing to reduce recent overpayment and overcrowding. There is also a need for high-density housing that supports economic recovery, accommodates new workers and their loved ones, and economizes the costs of infrastructure. It is quite a balancing act. Open spaces need to be conserved and the distance between new jobs and new homes reduced.

The Importance of Hiring a Property Management Company

In this age of independence and mindset that one can manage on his own, it is inevitable that a property owner would think he will do fine on his own. Sure, you got tenants who at first, pay on time until gradually they won’t, some will breach the contract and lease terms, then they cause problems with the neighbors and other tenants, then slowly you will notice you are losing money and when you decide to evict the tenant, next thing you know, you have a lawsuit at your doorstep.

The reality is if you use the services of a professional property management company, not only do you have peace of mind, your investment is protected and the consistent cash flow you receive through rent can assist you to buy additional investment properties.

This is why you need the assistance of a property management company, but before that, we will determine the pointers on why it is important to hire one.

Determining the Worth of Your Property

The problem with inexperienced owners is that sometimes they get overwhelmed on how they price their property to the market: oversell and you have to deal with the high vacancy rate with no profit, undersell and you will realize you are slowly losing profit. This is where a property management company comes in, they will help you determine a balanced meal where you gain tenants and continue to rake in profit.

A property management company is also well-versed in marketing your property and placing ads where it will attract tenants. They will answer any inquiry and they know what entices a prospective tenant, therefore will help you point out some cosmetic improvements so that the tenants will feel that renting your property is worthy of their money.

Avoiding Major Problems with Tenants

Screening tenants would not be one of your problems anymore because the property management company will take care of it. They know too well how to check the background of the interested tenants, their criminal records, their relationship with previous property owners and if they have ever caused problems before. Think of it as helping you weed out the bad ones for a healthy and bountiful crop.

Collecting rents is the most common problem in renting out your property. When left to your own devices, having your tenants pay you on time will become a child’s play of hiding and seek between them and you as the property owner, certainly some tenants will tug at your heartstrings and gain your sympathy with the hope that you will let them get away with it. A property management company, however, will become the middleman who will ensure that the tenants abide by the lease terms and should understand that they are just doing their job for you, keeping your cash flow consistent.

Maintenance

When a tenant has reached the end of the contract, the grueling process of turnover will usually keep you busy as a property owner, but with a property management company by your side, that is another pile of stress that will be taken care of. Any deductions from the security deposit will be made and returned to the tenant, and the restoration process of repairing any damages, repainting, changing locks and cleaning the property would be done without getting your own hands dirty.

As a property management company, expect that they know the right people to contact should there be any problems with leaks, wiring, and plumbing experienced by the tenants and their dilemmas will be addressed promptly.

Saving Time and Money

A successful businessman knows that delegating tasks is key for a successful business so that one can have more time to deal with other business ventures. With almost everything being taken care of, it seems like the only thing left to do is to visit your property at a certain time interval and continue to rake in profit while having more time to spend it with your family, social life, other priorities, and investments.

IN CONCLUSION

Hiring a property management company takes care of the burden for you, especially if you are well aware that marketing, confronting tenants with late payments and handling maintenance are not your strongest points especially if managing your property is not the only priority you have in your busy life. Therefore delegating this task to a reliable property management company may just be one of the best decisions you have ever made.