India is one of the largest economies in the world that provides potential buying options in real estate for NRI investors. With the rupee falling, the real estate market has opened up a lot of investment opportunities for Non-residents of India.
Not only that, if you have taken a home loan to purchase the property, you can also use the rent amount to pay off the EMIs for home loan making it feasible to own residential property in India.
According to a report on MoneyControl which quoted market expert Subhash Lakhotia saying that, if a Non-Resident Indian invests in a real-estate property today, then surely it will bring higher appreciation in the years to come and that the investment made today will not bring any regret.
Keeping this growing investment trend in mind, here is some necessary information that potential NRI investors should follow before investing in Indian real-estate.
According to report on Business Insider,
Studies indicate that NRI investments in real-estate will surge by 35% against 18% from the last fiscal year.
According to the survey conducted for the report, NRI’s are interested in premium properties that feature high-end residential complex with state of the art amenities and commercial properties.
The report also says that Bengaluru is one of the prime locations for NRI’s to make home investments.
The major reason for Bengaluru to become one of the favourite locations for owning residential property is because of its IT sector.
The other locations which are sought after are Ahmedabad, Pune, Goa and Chennai.
A large number of enquiries about properties are coming from Indians residing primarily in the Middle East, the US, Singapore, Australia, UK, Canada and South Africa.
Tips for investing in India
Understanding Market Scenario
Conduct thorough research on the economic situation in India and market rates before investing in India.
Familiarize yourself with exchange rates and taxation applicable on your home investment.
The centralization system in India, leads to steep growth of population and real estate value in the periphery of cities. Hence, buying real estate in upcoming cities, second tier cities or periphery of developed cities/metropolitan areas can lead to increased rate of return when compared to investment in developed parts of cities.
It is important to conduct thorough ground checks of the property.
Examine all the legal documents pertaining to the investment. There have been many cases of residential complex being built on agricultural land or on land meant for low-cost housing. In such cases, the government has the full power to stop construction and deem the investment as illegal, irrespective of who buys the property.
Familiarize yourself with governmental acts such as Foreign Exchange Management Act and the Income-Tax Act before investing in real-estate in India.
If you are availing the help of a builder/real estate agent, you have to check his/her reputation and track record before deciding to engage him/her. These precautions will help you avoid future troubles and prevent you from becoming a victim of real estate fraud.
Understand Taxation on residential properties
Taxation depends on the kind of property you are buying. Service tax applicable for a property by a builder is 12.36% on 25% of the total price for apartments up to 2,000 square feet and 30% for bigger apartments.
Making the Purchase
After narrowing down to a property of interest, you will arrive at a price at which the sale is agreed. Make sure to draw up a sales agreement on a stamp paper which will mention the final amount, advance payment or down payment and the time limit set to pay the due amount with details of instalments.
We hope that this information was helpful enough to encourage you to make your first Indian home to be a Durga Petals home.