The proliferation of homestays in Darjeeling town is posing a serious problem for people seeking upscale rental properties in the town.

Many residents of the Darjeeling town have told this newspaper that getting a rented property in upmarket areas of Darjeeling became “extremely difficult”.

“There are hardly any upscale properties available for rent. Most of the new properties coming up in the rest of the town are being converted into homestays,” said Nripendra Tamang, a resident.

People who have recently converted their buildings and flats into homestays said the dividends of the new business were much higher.

“Homestays usually charge anything between ₹1,200 and ₹2,500 per person per night. The cost covered food also. Some homestays even accommodate around four people in one room,” said a tourism stakeholder, adding that the rent would be much less compared to homestay charge.

Homestays are a huge hit among tourists across the Darjeeling hills.

“There is a steady flow of tourists throughout the year. Most of the marketing is through word of mouth. We also get a lot of repetitive customers,” said Adhindra Pradhan, owner of Yashita Homestay, which is situated at Haridashatta in Darjeeling.

“Even the properties available for rent in slightly far-off places from town are reluctant to let out places to families,” rued a local person.

Sources said homestays were also being taken on lease by people from the plains, including Calcutta.

“The lease rate ranges between ₹50,000 per room per annum in rural areas to around ₹1.5 lakh per room per annum in upmarket areas of Darjeeling town,” said a source.

Many locals are leasing out their properties to outsiders.

Even though homestays should not have more than six rooms, many homestays exceed the limit.

Sources said Kalimpong district boasted 1,070 registered homestays and Darjeeling district got 387 registered homestays.

Bikram Rai, the president of the United Sitong Homestay Welfare Society, said only one-fourth of the homestays were registered with the government in Darjeeling district.

“This is because many people have problems with land documents,” said Rai. Most plots in Darjeeling district are either leased out to tea gardens or come under the forest department.

Registered homestays are granted ₹1 lakh each from the state government for the development of the property.

On Tuesday, the government distributed ₹1.73 crore to homestay owners in Darjeeling district.