Properties, Homes & more

I have recently came across an informative post from Mohsin about Affordable Housing in and around Pune. Mohsin talks mainly about the following major areas of Pune which offer budget housing to all:

Kothrud: It is one of the fastest growing suburbs of Pune located in the south west of the city. With the rapid developments, this area has become one of the fastest growing residential localities of Pune. This place is inhabited by lots of students as many educational institutions like MIT and Cummins College of Engineering for Women are located in this area.

Aundh: Aundh is the last part of the “core city”, before going outwards towards Hinjewadi IT park. After development of Hinjewadi in last 10 years, Aundh has grown its importance and is considered to be heart of the city, especially for people working in IT sector. Availability of malls, hospitals and schools make it very attractive, but slightly expensive option.

Balawari: Balwari became known to everyone because of the stadium built for national games in 1994. After development of the Katraj bypass going to Mumbai, and Hinjewadi IT park, the entire region got a boost in terms of property prices and general economic development.

Kondhwa: It is amongst one of the oldest colonies of Pune city and lies in the south eastern part of the city. Kondhwa has the National Institute of Banking and Management (NIBM). Wanowrie area, under Kondhwa, houses huge Army medical set-ups like the Armed Forces Medical College (AFMC) and the Command Hospital and the Artificial Limb Center.

Pashan and Baner: Baner and Pashan both saw a tremendous boost in development in last few years, because of ease of commute towards city center as well as Hinjewadi IT park. Pashan’s growth in terms of new development is slightly restricted because of presence of large number govt. organizations and the resulting lack of land availability.

Kharadi: On the East side of the city, Kalyani nagar first saw a quick growth of IT and resulted into expansion of city horizons on Nagar road. Kharadi bypass, connecting the Nagar road to Hadapsar, saw real estate rates shoting up from measly 1000 Rs to around 3000 Rs. per sqft. We think there is a lot of growth potential in this region and investment can still be worthwhile.

Katraj: Another fast growing suburb of Pune is Katraj that is located in the southern part of the city. Katraj is quite well known for the campus of Bharti Vidyapeeth University, the Katraj Milk Dairy and the Katraj Snake Park. The New Katraj Tunnel here is a highway tunnel located on the NH4. The place is located at 10.2 Km from the Pune railway station.

Kotak Mahindra Bank joins rate war, offers 8.49% fixed rate for home loans. After banking biggies - SBI, ICICI and HDFC - it is now the turn of Kotak to announce its special home-loan scheme, offering an 8.49% fixed interest for first 30-months.

The special offer can be availed for all new loans irrespective of the loan amount, but will be limited till January 31, 2010, the bank said in a press release. The private sector lender will charge floating rates (prevailing at that time) on these loans after the 30-month period, which will be decided based on the retail prime lending rate, the bank said. While the fixed duration loan rate will remain the same irrespective of the loan amount, the floating rate will vary with the loan amount, the bank said.

<< Jerry Rao’s interview on creating low cost housing the professional way

Jerry Rao, founder of IT firm Mphasis, wants to deliver low-cost good-quality homes to buyers like drivers, housemaids, plumbers and electricians. Jerry Rao’s new venture, Value and Budget Housing Development Corporation, is targeting building a million homes in 10 years in 17 cities. Excerpts of an exclusive interview with ET, Jerry Rao (JR) defends his new mantra…

Interviewer (I): How will you address the backend challenges? Your buyers constitute the unbanked part of the population!!

JR: There are two big demand-side challenges. One, unlike in Manila and Sao Paolo, where poor and rich neighbourhoods are far away, in Indian cities, the poor live inside the city. Now, we are giving them housing far away. So, there is a commute cost and a commute time. That is a demand-side dampener.

The second is they may want to buy but how many of them will qualify for a loan. That certainly reduces the size of the market. But, believe me, these people have the ability to downpay Rs. 50,000 to Rs. 1.5 lakh. These people live frugally and save a lot. Over time, we believe the system will be in a position to offer 15-year mortgages in the Rs 2-8 lakh range.

I: What is your assessment of the buyer profile?

JR: They may be poor but they are upwardly mobile - these are NOT the absolute destitutes or the pavement dwellers. What they want is to get out of their present shanty / to a more secure place. They want compound walls, security, indoor toilet and privacy. Most want their children to go to English medium schools. The target buyer is someone, who has an income and also high labour mobility so that even if he moves to the city outskirts, he would get a replacement job pretty quickly. Like a driver or high-skilled construction worker.

--- As told to the Economic Times ---

As more and more people flock to metropolis (for whatever reasons), the stress on its housing resources is multiplying and the direct impact is on accommodation. A significant part of our income in any metropolis is spent on the living: house rent if you’re living on rent or maintenance if you own a home. Typically many people tend to live on rent and this tendency has given rise to a whole new business: renting out. A few years back, renting out was not a big deal. You just need to decide on the locality and the budget you can afford and you will easily get a nice house. However things have changed after incidences of terrorist attacks.

I would not go in depth about the terrorism, but investigations revealed that these terrorists have rented out places in the metropolis and managed to get unnoticed. Hence, it was recommended that everyone who wants to rent a property must undergo police verification. Well, this is a good move, but not always practical. The most important question is: how would you find good people to rent your property out? I am sure you will not simply rent it out to anyone. After all, it’s YOUR home and you’d like it to remain as lovely as you’d keep it yourself.

Hence, it is quite important to find out good people to give your house on rent. That’s where GoRenter will help you out. Once you subscribe by paying a small fee and specifying details of your property and what type of people you’re looking for and the budget, GoRenter will match with its extensive database and provide you notifications whenever a suitable match is found. It also acts as a middle-man in sorting out differences, if any, between the two parties. It will also take care of the police formalities and will ensure that the rent agreement and other procedures are done hassle-free. True that this is, for the time being, limited to Arizona Property Management, I am sure it will soon expand to other locations. If you would recollect, GoRenter was in a big mess earlier with lot of unresolved disputes between previous owner and customers. However, it has now undergone lot of restructuring and the new management is quite promising, determined, focused, and supportive. I have gone through GoRenter.com Reviews and I must say that it offers good quality service at very affordable rates. I have not faced any issues / disputes with them and am sure no one will. If you’re looking for Homes for rent in Arizona, GoRenter is THE place. If I have to say my opinion, just go for it…

Jerry Rao, founder of IT firm Mphasis, is completely immersed into his next business innings: Nano housing. Just like the Nano car, he wants to deliver homes to buyers looking for affordable homes: including drivers, housemaids, plumbers and electricians. Jerry Rao’s new venture, Value and Budget Housing Development Corporation, is targeting building a million homes in 10 years in 17 cities.

In an exclusive interview to Economic Times, Jerry Rao said, unlike conventional developers, his business model would treat land as an inventory and not a capital asset. If he is able to roll out his project and deliver in 12-18 months, the returns would be in the region of 30-40% almost similar to what the IT industry enjoyed in its dream run. Excerpts from the interview:

Interviewer (I): After IT, banking and angel investing, what made you think of housing?

Jerry Rao (JR): I could retire and do nothing. At 57, I have got at least another 5 to 10 years to do something else. I did want to stay away from IT and banking and wanted to do something of scale. I looked at agribusiness, education, health care and it seemed to me that I could leverage my IT and project management skills in housing. And, there was no paucity of demand. So, you could scale this business and create a big impact.

I: What is the difference between your business model and how conventional realty operates?

JR: Unlike conventional realty, we want to think of land as inventory and want to sell it as soon as we can. That is the basic difference that sets us apart. I thought it would be a high risk model. But, the downside here is very low. We are using equity to buy land. We will have access to construction finance and then we also get 25% down payments from buyers. So, even if the project goes bust, we can still repay all the loans and also repay equity. But, if we get it right and build and sell the project in 12-18 months, then the return on equity will be in the 30-40% range. It is actually quite an attractive place to be in.

I: Then, how come nobody else has entered the space?

JR: Why did nobody create a low-cost detergent before Nirma? The high-cost market was profitable enough. One, it is partly a supply side problem that people do not re-engineer. Two, the middle-class and upper-class segment, Rs 0.50-1 crore, has been very profitable. Three, if you are looking at land as a capital asset, you would not do it. This model requires a mindset shift.

Do not forget to read PART 2 of the interview…