Personal Finance

WFH: Four immediate housing questions

Meera Siva | Updated on May 19, 2020 Published on May 19, 2020

Move to long-term work-from-home situation requires rethinking by tenants and owners

The ever-extending lockdown has certainly made many of us think about the features we want to have or avoid in our homes. Maybe you have two adults working from home, kids doing online classes plus you may be hosting entertainment and fitness activities ― that happened outside so far ― all in your house now. And these changes don’t seem all very temporary, especially with many large companies such as TCS saying that they may mainstream the work-from-home (WFH) policy. Also, in the context of financial concerns, it may be worthwhile evaluating your space needs and location preference.

Move out

If you are a tenant, the first question to consider is, if you need to move to a larger space. It is possible that you are managing in a small area that is centrally located. But do this after you consider re-organising the space with inexpensive investments ― by adding a partition, buying foldable furniture ― to re-purpose the same area.

The rule of thumb is that 60-75 sq feet of working space is needed per person to work effectively. If this is not available, moving to a larger area to do focussed work is a worthy spend. For one, your job performance will increase and there will be lower stress for others.

Finding a larger place nearby is one option, but availability and higher rent may be concerns. You can look at independent homes as a choice ― these may be priced 10-20 per cent lower than multi-storey apartment complexes in some locations. Apartments may also pose perceived infection risks due to density, and individual homes could be an alternative. Also, there is more interest in growing food locally and the option to have a larger garden can be an advantage.

Small town

If you are renting and want to save on rent, you can move to a different town, from the city. This is especially true if your location choice was based on being closer to your place of work or entertainment and if you are sure of working remotely. Data on rent and cost of living at online site Numbeo shows that cities such as Mumbai and Gurugram are nearly twice as expensive as towns such as Thiruvananthapuram and Visakhapatnam.

The move can also enable you to buy a home sooner in these towns, given the more affordable price tag. For instance, based on the National Housing Bank’s Residex Index for September 2019, per sq ft price in Mumbai is ₹25,802 compared to ₹4,035 in Nashik. Price appreciation can also be good, as unlike in the past where rapid urbanisation created higher housing costs in cities, there may now be a conscious decision to promote growth of industries and jobs in smaller cities. These measures ― by the government and companies ― may bode well for price appreciation in select small towns that can attract talent and develop infrastructure.

Rent worries

If you are a landlord, your immediate questions may be how to react if your tenant does not pay rent. The Home Ministry had directed on March 29 that landlords may not collect rent from labourers and students for one month. States such as Maharashtra and Delhi have asked landlords to not put pressure on tenants for two-three months.

The Supreme Court, in an order on April 30, refused to allow rent waiver for the legal chambers of advocates during the lockdown. It noted that there cannot be blanket orders as there are circumstances of the owners and tenants to consider. So, you must see if the tenant’s situation requires some concessions and whether your finances allow it. You can also take comfort in the rental advance you may have received and ask them for a reduced payment in the short term.

Renting out

If you live in your own house now, you can still think of renting out the place and moving. For instance, if you own multiple houses ― in the city and the outskirts ― you can debate which makes more sense now. If the space in the city home is not large enough or if you can earn higher rent on the city home, it may be worthwhile to consider moving out of town. Likewise, if you lived away from the city to be close to your workplace, a move back can be useful ― especially if you can manage financially and it brings you close to the family that may need help.

An option to consider when renting out is to position it as an office space for apartment residents. Many of them may be crunched for space and would not mind taking up dedicated office space in the same complex. The shared office space model can provide higher rent, but would require more co-ordination ― for example, someone may drop out of the group.

More space

Staying home for work means requiring at least 60-75 square feet of area per working person

Think points

  • Move to suburbs
  • Shift to a town
  • Fair rent terms

(The author is an independent financial consultant)

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Published on May 19, 2020
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