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Saturday, November 10, 2007

Realty Bytes - Reality hits us full-on!

I'm back! It's been a whirlwind year+ for us since we moved from Seattle to Bangalore. While we have been exposed to high energy levels being here there have been several incidents that have left behind a sour taste. I have tended to be positive on my previous blogs and optimism is one of my core traits but sometimes the "Once Bitten..." experiences need to be shared with friends and doses of realty are necessary medications.

As you already know from my previous posts moving from Seattle we landed into a mild summer night in Bangalore with all our 8 bags. We were to move into a service apartment that I had taken pains to arrange during my previous visit. It was a new apartment and was promised to be ready by the time we landed. A quick call and we realized that the apartment is getting finished. When we moved in there were at least half a dozen people painting, staining, bringing in new furniture... Work in the house continued for the next 10 days, the "settling process". This was our first taste of realty experience and certainly not the last.

During our four months stay in the service apartment - what you say - yes we really were there for four months. It took us this long to find a reasonable apartment to move into. We quickly realized in the time we were in the service apartment that rents were not realistic. A hole in the wall style apartment would ask a rent of 70K per month.

We found a penthouse in the same building as the service apartment in the first two months and we signed a lease that was far more than we were originally planning to spend. As expected it was under construction and was to be completed by Sep. "Come September" and the "NRI" (you wish) owner tells us that he cannot guarantee the apartment even by Oct. In fact he encouraged us to break the contract leaving us with no options. Later we found out that the [*** expletives for owner deleted ***] had in fact begun negotiations with another potential renter while he was under our legal contract. This despite himself having proclaimed to be an NRI who understood our expectations and supposedly had good "ethics".

In a fix we were able to find another penthouse in the same apartment complex with still a high enough rent that was not justifiable. Of course as usual lot of work was pending (such as an al-fresco master bedroom) before we moved in and some even after we moved in. With our good sense we were able to transform the less than basic apartment into a posh Manhattan style residence. Hopefully we would be in this place for a couple years till we find a reasonable residence to own.

Barely 8 months into the rent and having just settled in with the last of the boxes emptied, our LESSOR (I refuse to call anyone a landlord) decides to DOUBLE OUR RENT! They offers us the "first" refusal (how magnanimous)! We begin our frantic search for another place either to buy or rent.

During our previous realty search while in the service apartment we had exhausted all possible options and the chain of realtors. This search was no different. The same realtors, the same properties (yes they were all still in the market). The only difference was that the expectations of the owners had gone even higher. How can anyone sane increase the rent on their property which has been vacant in the market for over a year? But realty in Bangalore is neither sane nor is it for the sane. The same hole in the wall now rented for upwards of 90K. Both a 3000sft and a 2400sft property in the same community were expecting the same rent for a basic setup. All owners are waiting for this one "Expat" of an MNC to come and agree to the high rates. And while they wait the apartment / house can continue to stay empty even if it means couple of years of no rent.

Finally we have found a residence that meets most of our expectations. But this time we intend to be very proactive and plan to buy something that would be ready for us in the next 18 months to move into.

In all our experiences we now quickly realize that there is no such thing as a "reasonable place" in Bangalore. This is the "American dream in Bangalore" and all people returning to India should set appropriate expectations or rather no-expectations. Bangalore property rates are comparable to California properties. But you just don't get the same value. The only people who are benefiting from all this are the real estate agents. With increasing prices their fees @ 1 months rent or 1% of the sale value have given them a windfall over the last several years!

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