Landlords opt for full financial review of rentals as India's rental market grows

As India's rental market is growing at a faster rate, landlords are taking help of technologies to check the background of tenant to avoid legal trouble in future.

“Most still rely on an 11 month agreement and a police verification form, which is often delayed and limited to a criminal record check against one identity document, says Karan Bhatty, founder of Millow, a background verification firm.

The market it protects is large. India's rental housing market was valued at USD 20.31 billion in 2024 and is projected to reach USD 26.78 billion by 2030, according to ResearchAndMarkets. The World Bank expects 600 million people, about 40 per cent of Indians, to live in urban areas by 2036, and many of them will rent.


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Indian tenants currently have a staggering Rs 1,26,042 crore locked up with property owners in security deposits across the top six metros.

The country's premier commercial and tech hubs command the largest share of this locked wealth. The Mumbai Metropolitan Region (MMR) leads the charts due to premium rentals, while Bengaluru is driven by steep customary upfront deposits.

Anarocks data says that rental yields in top housing markets improved between 2019 and the second quarter of 2026, while an earlier study of its own put rent rises at up to 64 per cent since 2019 in some major city micro markets.

Bhatty said that a bad tenancy is expensive to undo. A civil eviction suit can take one to three years. He cited a Delhi landlord who let a room at Rs 25,000 a month to a tenant who defaulted soon after moving in. Recovering it took months in court and legal fees of more than Rs 1 lakh.

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The Model Tenancy Act 2021 provides for a Rent Court and Tribunal to decide cases within 60 days, but it is advisory and many states follow older rent control laws.

The owner of premises leased at about Rs 6,00,000 a month recently asked for a full review of a prospective tenant covering finances, criminal and civil court records, sanctions and adverse media. Developers face a similar exposure from buyers who misstate their identity or source of funds.

"The cost of not screening is always higher than the cost of screening," Bhatty said.

After three years of sharp post-pandemic rental inflation, rent growth across major cities has begun to moderate, with Bengaluru, Pune, NCR and Hyderabad seeing a slowdown, while Mumbai and Chennai continue to register strong increases in 2026, according to proptech platform.

A growing number of Indians are choosing to rent for longer, not merely because buying has become more expensive, but because renting increasingly offers the flexibility and lifestyle they value. At the same time, for many others, renting has become an economic necessity as the gap between home loan EMIs and monthly rents continues to widen, according to NoBroker.

The NoBroker report said that the annual rent growth in Bengaluru has moderated to roughly 7%, easing from 8% in the prior cycle and well below the 10–13% range recorded between 2022 and 2024.