Rental Housing and Build-to-Rent Models: Redefining Urban Living in India

India’s urban real estate market is evolving rapidly, with traditional ownership-centric mindsets giving way to more flexible and pragmatic approaches to housing. Among the most notable shifts is the rise of rental housing and the emergence of Build-to-Rent (BTR) models. These trends are transforming how urban dwellers—especially millennials, working professionals, and migrants—access and experience living spaces.

As job mobility, delayed homeownership, and affordability concerns reshape housing demand, rental housing is moving from being an informal, fragmented sector to a more organized, investor-friendly asset class. The Build-to-Rent model, already thriving in global markets like the U.S., UK, and Australia, is now gaining traction in India, presenting new opportunities for developers, institutional investors, and PropTech platforms.

Understanding Rental Housing in the Indian Context

India’s rental housing sector has traditionally been driven by informal agreements, individual landlords, and low-regulation environments. However, the demand for quality rental accommodations has surged due to several factors:

• Increasing urban migration for jobs and education

• Rising property prices in metro cities

• Youth preference for mobility over ownership

• Lack of affordable housing in city centers

• Growing expat and NRI populations in cities

According to industry reports, nearly 28% of India’s urban population lives in rented homes, with demand concentrated in metropolitan cities like Mumbai, Delhi NCR, Bengaluru, Hyderabad, and Pune.

To address the growing gap between demand and organized supply, the Indian government launched the Model Tenancy Act (2021) to promote transparency, standardize rent agreements, and protect the rights of both tenants and landlords.

What is Build-to-Rent (BTR)?

Build-to-Rent refers to residential developments that are specifically constructed for the purpose of renting, not selling. Unlike traditional housing projects that rely on unit sales for revenue, BTR properties are retained by the developer or an institutional investor and leased to tenants on long-term or flexible contracts.

These properties often come with:

• Centralized management

• Professional maintenance

• Amenities like gyms, coworking spaces, and community lounges

• Standardized leasing processes

• App-based services and smart home integrations

The idea is to offer a lifestyle-based rental experience, moving beyond just shelter to include convenience, comfort, and community.

Why Build-to-Rent is Gaining Momentum in India

While still at a nascent stage, the BTR model is finding a foothold in India for several reasons:

1. Growing Millennial and Gen Z Workforce

Young professionals prefer mobility, experiences, and flexibility. BTR projects cater to this demographic with modern amenities, digital convenience, and lease flexibility.

2. Investor Interest in Income-Yielding Assets

REITs (Real Estate Investment Trusts) and institutional investors are increasingly interested in stable rental income. BTR provides predictable returns and long-term value appreciation.

3. Urban Affordability Gaps

Home ownership is becoming unaffordable for many in top-tier cities. BTR provides a practical housing solution in prime areas without large capital commitments from tenants.

4. Operational Efficiency

With centralized management, economies of scale in maintenance, and digital platforms for leasing, BTR operations are more streamlined than fragmented rental models.

5. Government Policy Support

With the Model Tenancy Act and Pradhan Mantri Awas Yojana (Urban), the ecosystem is becoming more conducive for rental investments and public-private partnerships.

Comparison: Build-to-Rent vs Traditional Rental Housing

Case Studies and Examples in India

1. Bengaluru – IT-Driven BTR Development

Several real estate firms are piloting BTR projects around Electronic City and Whitefield, offering plug-and-play rental homes for IT professionals.

2. Gurugram – Corporate Housing for Migrant Workers

Institutional BTR projects near business parks are providing managed rentals with shared kitchens, laundry, and shuttle services.

3. Pune and Hyderabad – Student Housing and Co-Living

Developers are building BTR-style student and co-living housing that mimics the model, offering dormitory-style living with private rooms, communal spaces, and app-based services.

Challenges and Considerations

While promising, BTR in India also faces challenges:

• Land Acquisition Costs: Urban land is expensive, which can delay project feasibility for long-term rental ROI.

• Regulatory Uncertainty: Despite the Model Tenancy Act, enforcement and adoption vary across states.

• Market Awareness: Tenants and investors are still learning about the advantages of structured rental living.

• Taxation and Legal Hurdles: GST implications, property taxes, and rental income tax treatments need greater clarity for institutional players.

However, as urbanization accelerates and consumer behavior shifts, these barriers are gradually being addressed by evolving policy frameworks and increasing private participation.

The Role of PropTech in Supporting BTR and Rentals

Digital platforms and real estate technology are critical in scaling the BTR model in India:

• Virtual property tours

• AI-powered rent pricing tools

• Automated leasing and documentation

• IoT for building management

• Tenant feedback and community engagement apps

The integration of technology not only enhances the tenant experience but also ensures transparency and efficiency for owners and managers.

HexaHome and Hexadecimal Software: Enabling the Future of Rentals

In this dynamic rental landscape, HexaHome is playing a pioneering role by offering a seamless digital platform for renters, landlords, and property managers. From curated rental listings to smart lease agreements, HexaHome simplifies the rental journey for today’s digital-first urbanites.

Backing this innovation is Hexadecimal Software, a powerful PropTech backend solution designed to support BTR operators and rental developers with:

• End-to-end property lifecycle management

• Automated rent collection and maintenance workflows

• Smart tenant CRM systems

• Integrated compliance and legal modules

• Scalable cloud architecture and analytics dashboards

Together, HexaHome and Hexadecimal Software are not only supporting the growth of rental housing in India but also shaping its transition into a modern, tech-enabled experience—making urban living more accessible, organized, and efficient than ever before.