Investing in Indian real estate market? Here’s what you must know as an NRI
In India, the real estate market has always seen much interest from the Indian diaspora, as an investment avenue. With real estate developers continually trying to woo non-resident Indians (NRIs), they can choose from a variety of options, in the residential as well as commercial sections.
The real estate sector is in the midst of a slowdown, and this is the right time to invest. Developers are offering good deals and profits such as flexible payment plans, subsidy schemes, etc. Hence NRIs must take maximum advantage of this situation.
Buying and selling property
An NRI can travel to the country, buy and sell a property or give a Power of Attorney to a relative/friend and get the transaction done, without coming to India. NRIs can also take a home loan in India. Moreover, the documents for the home loan may vary, according to the specific country in which the NRI is settled. Normally, the duration of the loan will be between 10 to 15 years, while the amount that an NRI is eligible for, will vary based on income, age, education, etc. To finance the property’s or land purchase, it is always advisable to use a non-resident external (NRE) bank account, as this will benefit the NRI to take back the funds invested in the property or land when they resell the property.
Investing in Indian Real Estate for the future
This is the right time for investing in Indian real estate to those NRIs who are on the edge of retiring and planning to settle in India. In India, Social infrastructure in most of the large cities has developed a lot while civic infrastructure is also being ramped up. As numerous schools, hospitals and shopping malls come up, and connectivity improves, it will give rise to better standards of living. This will directly improve the quality of life after retirement.
Once the primary apartment is secured, NRIs can also use surplus money, to invest in a second home and use it to generate monthly rental income. However, NRIs must be aware of all the bye-laws and regulations that apply to an NRI investor, particularly with respect to taxes, as rental income is taxable in India and other countries, except in cases where an agreement exists between the two involved nations, with regards to double taxation.
Moreover, NRI investors should avoid projects by unknown real estate developers. Most of the buyers have fallen into difficulty by putting their funds in projects that lacked necessary clearances and fell short of even the least standards of quality. Unless an NRI plans to travel to India and evaluate projects, she/he should opt solely for reputed property developers. In all cases, NRIs should strictly verify various essential points, such as the track record, brand visibility of the developer, the social as well as the civic infrastructure available in the particular location, the facilities and the timelines for property possession, in the case of under-construction projects.
A real estate project that is targeted towards NRIs is similar to other offerings in the market. Moreover, a property should be evaluated, purely on the basis of its particular location, facilities on offer, the legal validity of its title, as well as the developer’s brand image in the society.