Fixing the trust deficit in Indias rental arena

Global Indians owning property in India are always on the lookout for credible counter-parties in the Indian real estate sector and here we explore some options. India is the world's fastest growing and third largest economy, 60 per cent of which is consumed domestically. Driven by a large population, rich resources, and skilled manpower, this growing economy experienced a gradual shift towards services and industry sectors in the past decade. With the establishment of a stable government providing a strong mandate for reforms and a decisive shift in policies such as National Urban Rental Housing Policy, the country is in the process of formalising regulatory and legal frameworks for the real estate sector, which is expected to grow by 70 per cent in the next five years. The rapid urbanisation, rising disposable income, and repatriation of non-resident Indians (NRIs) is fueling this ever-growing appetite for real estate, especially in urban residential space. The IMF estimates that there is a staggering 19 million housing unit shortage in urban areas alone. Renting a house is more cost-effective than buying one, so this huge gap in urban housing supply creates a tremendous potential for the residential rental market. Despite this demand, there are 11 million vacant and 0.8 million unsold homes in urban areas. This mismatch in supply and demand is largely due to the trust deficit issues faced by landlords who keep their properties locked up, and by large banks that are holding inventory as collaterals. Many of these landlords are NRIs, who dread dealing with brokers renting their property to unverified tenants, in case those tenants become squatters in a market loaded with tenant-biased regulations. A similar issue of trust is faced on the tenant's side. Tenants hold misgivings owing to the lack of verified listings and the fear of losing their security deposit. On the other hand, large banks are looking for a credible counter party to take the inventory into the rental market. This situation not only deprives landlords the potential rental income but also prevents tenants the ability to rent their dream home in an efficient and timely manner. According to a survey, large MNCs experience substantial productivity loss during their employee transfers, both domestic and international. It is no surprise then that a number of prop-tech start-ups have mushroomed in the last five years, aimed at solving this problem. But fragmented, untrustworthy, and part-solution offerings lack holistic and cost-effective attributes, with no post-transaction and long-term professional customer service. What we are trying to do with RedGirraffe.com is to offer comprehensive real estate agency services with the seamless interplay of sophisticated technology interface and a clinical operational layout. We have chosen the most complex market - India as our first country of operational launch. The firm aims to support its clients right from the search till the contract sign-up phase and all throughout the duration of the tenancy. Its proprietary technology, verified listings and tenants, and tailor-made options for MNCs streamlines and expedites the process of renting a property with peace of mind resulting in substantial savings for corporations and continuous income for landlords. This disruptive company hopes to build trust in the entire ecosystem by bringing transparency in its transactions via secure online payments, which will generate substantial revenues for the government in the form of service taxes. Manoj is a UK-based entrepreneur and CEO of www.redgirraffe.com - a London-headquartered real estate technology venture which has recently launched its technology and real estate operations in Delhi NCR area in India.