Renting in Mumbai: Short-Term Options and Associated Costs
While a one-year lease is generally preferred for both residential and commercial properties in Mumbai, shorter rental periods, such as two to six months, are indeed feasible, according to real estate professionals. However, these arrangements may come with a higher price tag.
Dynamics of Short-Term Rentals
Real estate brokers indicate that while no regulation prohibits property owners from renting private residences for shorter durations, they typically command a premium, often exceeding the standard rate by approximately 20%.
Key Aspects of Mumbai Real Estate Rentals:
- Leave and License Agreements: These agreements are standard for tenants and property owners in Mumbai.
- Stamp Duty: Payment of stamp duty is mandatory at the time of registering these agreements. The amount is determined by the monthly rental and deposit charged.
- Government Oversight: The Maharashtra government's registry office processes a significant volume of leave and license agreements, reaching up to 30,000 monthly.
Premium Pricing for Shorter Terms
Brokers emphasize that the limited availability of short-term rental options empowers property owners to charge higher rents.
According to Dhiren Doshi, a property consultant in Mumbai, "A property leased for six months can command a higher rent than an apartment leased for five years. This discrepancy arises from the scarcity of properties available for shorter leases."
He further elaborated that the owner is entitled to ask for a higher rent given the shorter rental period, suggesting possible reductions in premium if the property owner desires this type of lease.
Examples of Short-Term Leases
Recent transactions highlight the dynamics of short-term commercial rentals. IMC India Securities Pvt Ltd, as indicated in documents acquired via Propstack, leased 5830 square feet of commercial space in Mumbai’s BKC from Agni Commex LLP for a rate of Rs 700 per square foot monthly.
Specifically, IMC India Securities Pvt Ltd is leasing space at Maker Maxity 4, an office location in BKC, for Rs 40.81 lakh per month, or Rs 700 per square foot.
Real estate brokers also note that the rental rate of Rs 700 per square foot in this instance, which is more than the typical rate of Rs 500 to Rs 550 in BKC, reflects the short six-month term for the lease.