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A trend in real estate that has emerged in the last few years is of renting residential property (be it a house or an apartment) for a short period ranging between one and nine months. This is primarily because an increasing number of people looking for temporary accommodation are choosing to rent a house or apartment instead of opting for a guesthouse or hotel.
Here is a detailed look at residential property rented for short periods of time:
1. Rental rates are usually 10 to 20% lower compared to hotels and guesthouses.
2. Prices vary according to the season; rates are usually higher during the winter and summer months when the demand for short term rentals increases due to the wedding and holiday season. In some cases, corporate discounts and special family rates are available.
3. The resale value of these properties is usually six to eight percent higher compared to conventional ones.
4. A short term rental agreement is like any other agreement: a refundable security deposit amounting to two or three months’ rent is required up front, even if the property is rented out for a month. Utility bills are usually the tenant’s responsibility and are not included in the monthly rent.
5. Properties are usually fully furnished and equipped with facilities such as an internet connection and parking space.
6. A major disadvantage for owners renting property for the short term is that there is no guarantee that tenants will not misuse or damage the property. There is also the possibility that tenants will vacate the property without clearing the utility bills. However, these amounts can be deducted from the security deposit.
7. Properties are limited in availability and are primarily found in the following areas:
Islamabad: Sectors F-6, F-7, F-8, F-11, G-9, G10 and I-9.
Karachi: Clifton, Defence, Gulshan-e-Iqbal, North Nazimabad, PECHS and Saddar.
Lahore: Defence, Gulberg, Johar Town, Liberty and Model Town.
– Uzma Nawaz
First published in the Real Estate Section of the Dawn National Weekend Advertiser on December 15, 2013