Sir what can I do…the rents are too high?
Many kids ask me this question…and I am amazed how this city of opportunities also finds answers to this question.
First of all the high real estate prices in this city is keeping the rents high. However (luckily) there are no restrictions on the number of people who can live in one house. (The builders lobby is trying to bring this in, and soon municipal corporations will insist that only 2 persons per bedroom can live in one house – of course the no. of bedrooms will be increased by the smaller builders!!).
So you have young management graduates, ordinary graduates living in a group – and sharing the rent costs. In case of lower end employees like guards and drivers, they live about 10 or even 20 to a room! This is possible because all of them work shifts. So the guys in the night shift sleep during the day….
Paying rent in Mumbai, paying Mumbai level salaries and the high power costs makes very little sense for MOST lower end jobs. Ahmedabad is 40% cheaper in rent, 50% cheaper in labor, and about 30% cheaper in electricity! So if it is some data entry work or low end software work the chances are somebody will hire the facilities in Ahmedabad and outsource it FROM A software company in Mumbai!!
With 2% rental yields in residential properties and 4% yield in commercial property …Mumbai is showing all the signs of a decaying city! Hmmm i am expecting a bunch of angry mails, but the real estate to salary, real estate to retail margins, the average speed at which a car travels, the ugly old buildings – which the landlord has no incentive to rebuild, etc. are all LEAD indicators of Mumbai going the Kolkatta way…..
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