Like every other financial investment, investing in real estate also requires due diligence on the buyer’s part. There have been numerous instances where Non-Resident Indians (NRIs) have fallen prey to fraudulent practices or have simply taken a wrong investment decision. Many may not be aware of the FEMA rules and regulations, wherein NRIs having Indian passports, have the same rights as Indian citizens in property ownership norms. Apart from agricultural land and forests, NRIs can own land in the form of residential or commercial properties.
India is now a budding destination for real estate investments. More and more NRIs are looking to make some extra money or simply devising their future settlement plans. Real estate provides a huge potential to generate returns via rental yields and capital appreciation. NRIs should be aware of their risk appetite and likewise invest in Indian real estate. The area where an NRI invests depends on his/her requirements. If the person is looking to settle in India after sometime, then e can invest in a developing area of a city.
If the NRIs’ purpose is to get returns, he may buy real estate units in developed areas and use them commercially. He may also choose to invest in equity shares of listed real estate developers. Locations closer to better infrastructure must be chosen for greater long-term returns. NRIs should choose builders very wisely. A thorough background check is a necessity. The track record has to be scrutinized to find out delays in past projects or any legal problems. Buyers must not forget to check the legality/authenticity of the property, states VBHC Blog.
Before any deal is finalised, the NRI buyer must gather data on past history, current owner, local regulatory approvals and legal disputes. Government policies may seem complex to some and Indian real estate is susceptible to changing government regulations. Thus, understanding future plans of the government and policies related to freehold, leasehold and zoning areas are a must. Last but not the least, NRI buyers have to know the tax implications. The taxes include property taxes, rental taxes, TDS at the time of purchase and withholding taxes.
NRI buyers must appoint a trustworthy broker or property manager as it won’t be possible for the buyers to be in the country all the time. The buyers should also have a sound exit strategy. Investing in a property in developed cities of India has become more structured due to the rise of quality and reputed builders. However, doing the homework right is also vital.