Even after heading out to other parts of the world, Indians love to stay in touch with their motherland. This is clear from the huge rise in NRI investments in the Indian real estate market. It’s just another way for NRIs to return home. Well, at least in the long run, in some cases. Here we share a few valuable tips for NRIs to invest in Indian real estate sector.
There’s yet another reason that has pushed this trend. The Indian government has passed the Real Estate Regulatory Act (RERA) and the Benami Bill. This means that NRIs can now look forward to investing in the Indian property market much more easily than before. There are a few things though that must be kept in mind.
NRIs to Invest in Indian Real Estate: Types of Properties
An NRI is authorized to put in fund for both residential and commercial properties in India. However, any farmhouse, agricultural land and plantation property can be owned only if it is gifted to the NRI or inherited.
Tips for NRIs to Invest in Indian Real Estate
1. Do your research well:
As an NRI, it’s essential to know that all property-related dealings in India mainland need to be in INR. Most important, every currency rate is bound to be affected by market rise and fall. It’s therefore important for any investor, more so an NRI, to study the Indian real estate market conditions well in advance.
Besides that, the Indian government keeps bringing changes regarding the Indian real estate sector. This is generally in its annual budget. A knowhow of the same would also help because it has direct impact on NRI investments. Other things to study on include definite locations that have high-quality infrastructure in place. You need to consider the market image of the developer.
2. Choose the type of property first:
NRIs generally look for properties back home for investment reasons. However, some may also be looking at a future residential option in India. It’s important to first determine the exact reason for investing in an Indian property. Clarity on the same would help you make an informed and wise choice.
3. Plan your finances:
Before you think about investing, taking an intense look at your current financial situation would be a great idea. Most important, remember that all financial transactions would be done in Indian currency. Therefore, the first step is to open an NRE/NRO account in an authorised bank in India.
In addition, this account provides no-tax benefits and ease of sending money home anytime. You’ve finalised on the property to buy? Make sure that you arrange for the required funds. The RBI requires NRIs to fund at least 20% of the property value from own income sources. The rest can be via loans.
4. Choose a POA :
You’d also need a Power of Attorney (POA) who can lawfully act on your behalf in your absence. This is because it may not be possible for you to travel back and forth to supervise the property dealings. Besides that, if the property is under construction, you’d need someone back home to take charge of the quality of material used. Most important, a POA would manage all necessary paperwork to ensure that there’s no forgery in the deal.
Conclusion
New rules have opened up greater foreign investment opportunities. However, they need to be in agreement with the stated laws.
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