Guide to NRIs Investing in Property in India: Do’s and Don’ts

NRIs have always been important stakeholders in India’s real estate. According to recent news, the total NRI investment is expected to touch $11.5 billion in the top eight Indian cities in 2017, after which NRI investors will capture 20 per cent of the total market share, which is currently estimated at $60 billion. The election of the Modi government to power in 2014 significantly boosted the NRI investment trend. PM Narendra Modi, known for his love for NRIs, went on record and thanked the overseas Indian community for supporting demonetization in the 2017 Pravasi Bharatiya Divas, held on January 8. This gesture will only add to the overseas Indian communities’ keen interest in the country and its real estate.

Let us quickly sum up a list of do’s and don’ts for NRIs when investing in property in India.

Dos

  • Visit the Site

Investing in property is a big financial decision and should not only be based on the property’s photos, e-mails and phone conversations. NRIs should always take out time to visit the property before making any decision.

  • Ask Questions

In order to gain clarity in all aspects related to the property, be proactive and ask questions, not just the builder, but also your banker, lawyer, etc., related to all aspects of the deal, including the date of handing over, any legal complications, etc. It will help you get a clear picture of your investment.

  • Hire a Lawyer

As an NRI, it becomes even more important to hire a lawyer in case of a property deal. Because of being far away from the property, no matter how much you research the property, there still might be some aspects that escape your notice. A lawyer will help you with all the legal formalities of the deal, including title verification and registration of the property. Make sure you document every commitment made by the builder, while making most of the transactions through online transfers or cheques.

  • NRIs can Avail Home Loans in India

If an NRI opts to get a home loan in India, the loan term is usually 10 to 15 years and the loan amount is based on the NRI’s age, income, education, etc. Moreover, based on the country in which the person is settled, the documents for the loan may vary. Use a non-resident external (NRE) account to finance the property’s purchase. It will help you back the capital invested in the property, when the property is resold.

Don’ts

  • Be Wary of Unknown Developers

An NRI is strongly advised not to trust an unknown developer just because of the attractive prices they offer. Numerous NRI buyers have fallen into difficulty when they placed their funds in projects that lacked mandatory clearances and fell short of even the minimum standards of quality. Opt to invest with trusted and popular builders, ensuring a minimum guarantee on finishing the project on time.

  • Don’t Fall for the Builder’s Marketing Gimmicks

There are a lot of builders who promote a lot of their projects being exclusive to NRIs, which is nothing more than a marketing gimmick. Be wise and evaluate the project and property solely on the basis of its location, legal legitimacy, amenities and facilities and the strength of the developer’s brand and not on the ‘exclusive’ tag attached to the offer.

  • Don’t Trust When it Comes to Property

It’s good to get local knowledge but it can come to your disadvantage as the informer has no stake in the property. NRIs should give preference to their own research and instincts, rather than hearsay.

So, there you have it. If you are an NRI and is planning to buy property in India, check out these tips.

About the author

Mani Karthik

Hi, Mani Karthik here. Having lived in USA, India & Middle East, and worked for big MNC's to startups, I have a lot to share with you. My aim is to help people, by sharing everything I've learned in life. This blog is read today, by more than 200K people world over! I'm basically from Kochi, Kerala and spend my time between Los Angeles and India. Here's my full story. Connect with me on FacebookInstagram, Twitter or WhatsApp (+001-408-489-4785). :)

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