The Issue of Vacant Investor - Held Flats..

 The Issue of Vacant Investor

-     Held Flats In Pune..

By Mr. Kishor Pate, Amit Enterprises Housing Ltd

Pune has a high incidence of vacant flats in completed projects – properties that are not in use by the owners, nor rented out. Many of these flats are owned by NRIs who are working abroad and intend to return in the foreseeable future to occupy these flats.

However, a significant number of these properties is held by short-sighted investors who are waiting for sufficient upward movement in property prices to sell them at a profit. Because of this speculative intent, they do not rent these flats out in the interim, as they do not want to contend with problems that could arise from asking tenants to move out at short notice.

Mr. Kishor Pate,
Amit Enterprises Housing Ltd

 This is, in fact, a very negative situation that works against everyone – the current owners, future buyers and the market in general.

In the first place, the owner is paying society charges and property tax without any corresponding benefit. Secondly, it is known market fact that occupied properties tend to sell between 25% to 30% quicker than vacant ones.

This is because properties that have been standing vacant for considerable periods are usually not maintained and often fall prey to vandalism, illegal occupancy, degradation of fixtures, appliances, door and window fittings, electrical wiring and overall lack of maintenance. 

In a market like Pune where there is a sufficient supply of new projects as well as well-maintained second-sale properties, vacant properties are always at a distinct disadvantage.

Such properties are often associated with increased criminal activity as well as health and safety concerns in the neighbourhood. In metropolitan areas with high urbanization pressures, the fact that a property is in disuse may also rightfully or erroneously be associated with legal disputes or a faulty title.

To prevent such negative fallout, owners who for whatever reason do not intend to use a large residential or commercial property for extended periods should either rent out these flats or employ the services of a professional property maintenance service. 

Individual owners of single office or residential properties should retain a caretaker to maintain the unit. The best plan is always to rent out the flat to tenants who are looking for shorter tenures.

About the author

Mr. Kishor Pate is CMD at Amit Enterprises Housing Ltd.

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