It’s a daunting task for NRIs looking at investing in Indian property today. On the outside, with the rupee touching all-time lows against the dollar and India’s ‘real estate’ growth story looking bleak, the prospect for investments in property for NRIs seems like an uphill task. But this hasn’t deterred them from investing in India because, though for Indians property prices have appreciated significantly, for the overseas Indian, it has only been a marginal increase. So, whatever be your reason for investing in India, make sure that you are diligent and careful. Some important questions you need to ask yourself are:
Which city do you want to invest in?
In whose name do you want to buy the property?
If you have invested in a ready property, how do you plan to fund it?
Before any kind of an investment, engage in sufficient research or you may end up buying into micro markets. Also, make sure that the property has secured all clearances required by law. Insist on legal documents to ensure that your investment is safe.
Logically speaking, your first action plan should be to determine the nature of the property because NRI investment rules are different as per RBI guidelines. Buying a property requires time and energy and hence it’s advisable to not fall prey to hoax calls or ‘gut instincts’. Before you zero on into a project, speak to a few builders in the locality on the initial prices and the price for the last transaction. Make sure you visit a completed project by the builder to assess quality before deciding to buy.
Check the developer credentials, prime location, potential for infrastructure development and quality of property management in the project. Remember that apart from the registration cost and stamp duty, there’s also a service tax that will be levied. Once you arrive at a price at which the sale is agreed, pay through rupee denominated non-resident ordinary (NRO) or nonresident external (NRE) accounts and foreign currency non-resident (FCNR) accounts. It’s always suggested to invest in mind-sized property with high-end amenities.
Before you finalise on any property, find a good real estate adviser who will help you out with all the details. It’s advisable not to go to a broker. Most NRIs get tempted to purchase a holiday home in a hill resort or beach property or a retirement home over buying yet another flat in the city. But keep in mind that residential land purchases usually pay off well for most investors. Have any more tips? Share it with us.