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 Lease, Ownership, Resale, Booking & Documentation Related FAQs 
for Starlit Suites

Category 3 of 4

This section of Starlit Suites FAQs covers Lease, Rental Management Agreement & Other Documentation and booking procedure related questions and if after going through this section, you do not find answers to your queries or need more clarity on other aspects of this investment, we highly recommend you view our 3 other categories of FAQs as listed on the main FAQ page as doing so will give you tremendous confidence and belief in this unique investment asset in India.

If you still cannot find answers to your questions from this section, please feel free to contact us (click here for contact details) and we will be glad to answer the same.

Question 1

What kind of documents will be given to me when I invest in Starlit?

The below documents will be issued to you when you invest in any Starlit Suites property :

  1. Sale and Construction Agreement between You and the Builder
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  2. Rental Management Agreement between You and the Operator (Starlit Suites)
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  3. Furniture and Fitouts Agreement
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  4. Power of Attorney between You and the Operator (Starlit Suites) to operate the unit on your behalf.

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Question 2

Can I sell my unit at anytime or are there any restrictions or lock-ins?

  • YES, you can sell your unit anytime and NO, there are no restrictions or lock-ins.
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  • As the owner of the property, you are at liberty to sell your unit to anyone (G&C can assist in the resale if desired), provided the new buyer is willing to continue the lease contract for the remaining term of the original lease period.
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  • For example, if you intend to sell your unit after 9 years of operation, the new buyer will have to continue the revenue share agreement with Starlit Suites for the balance 11 years. But since there is a massive unmet demand for such high monthly income assets in India as explained below, this clause won’t be a hinderance to potential buyers/investors.
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  • There is a large enough market in India for monthly income generating investments that can provide ROI of at least 8% to 9% and since this asset will generate much higher returns, you will be able to easily sell off your unit at any point of time as there is no shortage of investors for such high monthly income assets.
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  • Infact, we have consistently received enquiries from many conservative investors who are happy and enthused about acquiring assets that give them as less as just 6% to 7% ROI p.a. as they are more bothered about safety of their capital and steady income and hence are ok with lower returns as well.
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  • Hence, you can take it for granted that investors would queue-up outside your door to acquire such a high income generating asset from you as there are very few alternatives for safer, stable and predictable monthly income in India.
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  • And because of this reason, the requirement of new buyer having to continue the lease agreement for remaining term of the original lease will also not be a big botheration or issue for the new investor / buyer.

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Question 3

What is the duration for which the rental management agreement is in force? What happens after this period? Will it be renewed? If yes, for how long?

  • The initial agreement will be in force for 20 years and is renewable perpetually thereafter for a period of 5 years at a time, at the mutual decision of both owners and the operator.
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  • Ideally, the operator would like to continue for as long as possible as by the 20th year they would have already established a strong revenue stream and consistently high occupancy level and it is very easy for them to continue the momentum and keep generating high monthly income for you.

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Question 4

Incase the agreement is not renewed, what else can I do with the investment?

  • Incase a majority of owners decide NOT to renew the lease, you will get back possession of your unit which you can then rent out on your own or use for self occupation or as a guest house.
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  • Since these properties are located either bang in the middle of IT parks / IT centric locations / major business / commercial districts, it will be very easy for you to find a tenant to rent the unit out on a yearly basis.
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  • These properties are perfect accommodation options for IT bachelors and newly wedded / starter couples who would love to take up such a fully furnished, fully air conditioned apartment with hotel like facilities – and hence such tenants will be willing to pay a higher rent compared to normal apartments, thus giving you greater ROI even when you rent them out on your own.

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Question 5

After few years, if the owner doesn’t want to renew the agreement and wants to self occupy the property or rent it out on his own, is it possible?

  • The initial rental agreement is for minimum of 20 years during which the investor CANNOT use the property for self-occupation or for any other purpose – it has to be given to the operator only.
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  • At the end of this lease period, if the majority of owners decide to let Starlit Suites continue operating the building as a hotel, then the investor has to go with the majority decision as it is in their better interests to lease it back to Starlit Suites and once again, in such a case, he/she will once again not be able to use the unit for his own use.
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  • In this case, the investor can see the unit to another person and then walk out of the property if he does not wish to keep it any further and use those proceeds to purchase another asset for self occupation.
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  • If majority of investors decide NOT to renew the lease, then the unit owners can take back possession of their respective units and are then free to do whatever they want with their respective units (that is, either rent them out individually or use it for self-occupation).

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Question 6

As a unit owner in Starlit Suites, can I use my unit for my stay as and when I want to, without paying for it?

  • NO, you cannot use the unit for your self occupation beyond the free 7 day per unit per year quote (explained below) WITHOUT PAYING as these units must compulsorily be given to Starlit Suites for them to rent them out without any interruptions in between.
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  • As a unit owner, you get 7 nights of free / complimentary stay with breakfast, per unit you own per year.
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  • If you want to stay for more than 7 nights, you can do so by paying the lowest discounted special rate for the additional nights and in such case, there is no limit to how long you can stay as a paying guest.
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  • Technically, since 50% of what you pay for your stay is indirectly coming back to you, you are going to end up paying out of the income that the asset is generating and not from your pocket.

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Question 7

As the years pass, there would be wear & tear and the property would need constant maintenance. Will this be managed by the OPERATOR? Will he bear the expense for the same or do owners (investors) have to pay this amount?

  • Yes. The maintenance of the property during the 20 year lease period is taken care of ENTIRELY by the operator himself at his own expense. The investor is not required to pay for any such maintenance of either the building, common amenities or to his / her own room.
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  • Any replacement of furniture and fixtures whether in your individual unit or in the common areas & amenities would be done by the operator at his expense only throughout the lease period and you are not expected to contribute towards the same.
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  • Even major upgrades to the hotel tower and to any major amenities or machinery such as lifts, generators, swimming pools, restaurants, etc will be done by the operator and such expenses are not borne by you (the investor).
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  • At the end of the lease period, the operator will hand your unit back to you in the same condition as it was handed over to them except for reasonable wear and tear of furniture and the building.

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Question 8

Are there any clauses of penalty to the builder / compensation to investor if there is any delay in construction of the hotel apartment? (i.e.delay by builder)

Construction is by top realty and infrastructure giants and hence you have nothing to worry on projects getting abnormally delayed. If delay is beyond a certain time period, you will be compensated by the builder and the same will be mentioned in respective agreements.

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Question 9

Are there any clauses of penalty to operator / compensation to investors if there is delay in commencement of operations by the operator?

There is no reason why operator would delay commencement of the hotel apartments as he is actually LOSING potential revenue for each day of delay in commencement of operations and hence would make all the effort and do everything possible to prepone & start OPERATIONS as early as possible and reasons for this are explained below :

  • The operator has established close and deep relationships with over 200 companies, including many Fortune 500 firms across various sectors. With many of such companies, the operator has also signed RATE CONTRACTS, which guarantee business and ensure sufficient occupancy every year across all the operator’s properties across India which in turn means that investors like you will earn steady, regular and high monthly income.
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  • Since these agreements are always ongoing and renewed continuously, there is no certain START DATE for occupancy at Starlit Suites and business will start as soon as the property is completed and handed over by the builder.
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  • Hence its obvious that operator would want to start bookings/operations as early as possible as there is READY business waiting to be taken and infact if building were to be ready completely by tomorrow, he would start operations right away tomorrow itself!
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  • The operator also invests a heavy amount upfront for working capital, manpower training, licences and initial trial operations even before he can generate his first rupee of income and the only way they can recover this money is by ensuring highest possible occupancy from Day 1 of opening of each property.
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  • Since you are not paying for the day to day operations, you as an investor have nothing to lose if there is no or low occupancy as your property continues to appreciate in value whereas operator is losing his working capital as he has to pay salaries and maintenance, irrespective of whether he is getting income or not. Hence, operator will be more than eager to start operations & maximise occupancy as soon as possible.
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  • Infact just to break-even (reach a point of no-profit no-loss on a day to day basis), the operator needs to reach a level of occupancy where investors earn atleast 9% to 10% returns p.a. and hence operator will be more than eager to achieve the highest returns for both himself and the investors to ensure profitability.
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  • Lastly, Starlit Suites is a PROVEN and SUCCESSFUL business model that is running in 4 cities for last 5 years and hence you can be rest assured that your income will be in line with the projections and occupancy can be taken for granted.

Hence, there is no need for any such clause to ensure occupancy by a certain time period as all the above will push and motivate operator to ensure maximum possible occupancy from Day 1, as he can earn only when you and other investors earn revenue (since this is revenue sharing).

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 Other FAQ Categories 

To learn more, we encourage you to read our other FAQ sections as shown below :

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