by THO
In yet another example of exorbitant security deposits charged for renting an apartment in Bengaluru, a fully furnished 2 BHK property in Koramangala was listed on X against a safety deposit amount of ₹2.5 lakh, never mind the additional cost of furniture. And guess what? The landlord met five prospective tenants within a span of nine hours and finalised the deal.
Entrepreneur Leesha Agarwal, who is moving out of her current 2 BHK accommodation in Koramangala, posted an advertisement on X to rent out the property at 12:14 pm on August 1.
“We are moving out of our current 2BHK in Koramangala and looking for someone who’d be interested in taking it up! Want someone who will be willing to take it as it is (with all the furnishings). Rent 43k, deposit 2.5L, all furniture additional costs,” Agarwal, who goes by the name @Theleeshesh on X, wrote in her post.
Agarwal attached pictures of a fully-equipped kitchen, two bedrooms and a living room, in what appeared to be a multi-story building in a gated society.
All about Koramangala
Koramangala is an upscale residential and commercial locality in Southeast Bengaluru, popular with young professionals and students. Located close to the heart of the Central Business District, 6 km from MG Road, property prices and rentals in this neighbourhood are amongst the highest in the IT capital.
Average rent for a 1 BHK unit in Koramangala hovers around ₹28,000 per month currently. Rents in the locality have grown roughly 5% year-on-year.
Also Read: Bengaluru’s rental market: Will zero deposit rentals provide an antidote to tenants’ woes?
At 9:07 pm the same day, Agarwal updated her post informing users that the apartment had been taken up. “Flat is gone. tyvm twitter. 5 people came one after the other to take the house and everybody begged us to not give it (to) anyone else. I have never spoken to so many people in a day and I will never do it again. Gn,” she wrote.
Tenants in Bengaluru have for the last few years struggled to cope with the ever-changing demands of the landlords, some of whom have gone to the extent of checking profiles of tenants on LinkedIn. There have also been instances wherein property brokers have allotted appointments to tenants for interviews with the landlords forcing many tenants to remark that cracking a ‘rental’ interview may be tougher than getting through a job interview.
According to online property search portal NoBroker, rental yields in Bengaluru are amongst the highest across major cities in India – around 4-5% as opposed to 3% in Mumbai and 2.5% in Delhi-NCR. Simultaneously, the average security deposit for rental housing in the city varies between 5-10 months of rent.
Last month, Indian-origin entrepreneur Hardeep Gambhir, who moved to Bengaluru following a seven-year stint in San Francisco, California, made headlines when he drew parallels between the two cities on X and complained about ‘ridiculous’ security deposits sought for rental accommodation in the IT capital.
In most cities, which see high influx of students and early career professionals every year, safety deposits for rental homes are usually pegged at a value equivalent to two months of rent.
Having said that, there is room for negotiation, especially between younger landlords and bachelor tenants, locals said.
Here’s why landlords charge a high security deposit in Bengaluru
Local brokers who spoke to HT.com cited the practice as being tied to an old mindset, which is slowly changing now.
“Landlords in Bengaluru traditionally charged 10 months of rent to hedge against the risk of property damage and tenants vacating properties on short notice,” said Kiran Kumar, vice president of Hanu Reddy Realty. He added that this seems to be changing slowly, especially with regards to smaller properties, with landlords in areas like Indiranagar charging six months’ rent as deposits now. Meanwhile landlords in areas such Basavanagudi, Malleshwaram and Banashankari continue to charge 10 months’ rent as security deposits.
Kumar emphasised that clients migrating from other metro cities, especially students and early career professionals, are compelling landlords in the IT capital to adopt a softer approach.
Of late, the zero-deposit rental scheme has been launched in Bengaluru. Under the scheme, the prospective tenant signs up a rental bond with the landlord and the third party executing it for a nominal one-time fee. The rental bond serves as a guarantee in favor of landlords, providing financial security in the event of tenant default, covering unpaid rent, utility bills, breach of lock-in periods, and property damages.
