NRI investment in the Indian real estate market has doubled from $5bn in 2014 to $10.2bn in 2018. This growth is largely in cities like Pune, Mumbai, Bangalore, Noida, and Gurugram. The key factors that create a positive atmosphere for NRI investors in the Indian real estate industry are devaluation of the rupee, favourable foreign investment laws, political stability, and well-priced properties. Apart from this, implementation of RERA, GST, and demonetisation has transformed this complex investment procedure into a simple and transparent one, thereby attracting more investors.Developers are now trying to attract NRI investors by letting them choose from an array of options in both commercial and residential segments.
If you are an NRI looking for an investment option in the Indian real estate industry, you must follow these dos and don’ts to secure your interests.
Dos of investing in the Indian real estate industry
- Proper research
- Pricing is one of the most important aspects to consider while investing in a property in India. This is why as an NRI you should first research the current property rates for the location you have selected. To save yourself from any financial loss you must compare varying property rates for under-construction projects as well as ready-to-move-in homes.
Also, don’t make an upfront down payment. Instead, choose a construction-linked payment method to keep your money safe. Apart from the price, also research the builder and the project you wish to invest in.
- Understand the laws
As per Indian laws, an NRI can visit India for the purpose of buying or selling a property. You can also give Power of Attorney (POA) to your relative if you do not want to come down to India to complete the transaction. Before investing in India, you should properly understand all the laws and tax implications of capital gains that govern these real estate transactions.
- Avail a home loan
Even though you are an NRI, you can avail a home loan in India. The lender will determine the loan amount basis your age, income, education, etc., and the documents you need to submit for this loan will depend on your present country of residence. To raise funds quickly you can look for trusted lenders and apply for home loans from Bajaj Housing Finance Limited for instance. Here you can avail a home loan of up to Rs.3.5 crore on competitive interest rates that you can repay over a comfortable tenor. Moreover, you can enjoy benefits such as property search assistance, in-person site visit assistance, nil prepayment charges, and minimal documentation.
- Check RERA registration number
With the implementation of RERA, all housing projects have a RERA registration number. Every RERA number starts with the state’s initials in which the property is located and you can check it online on the RERA website. Using this number, you can know every detail about the property including its construction status. So, courtesy RERA you can now keep a tab on every aspect of your prospective property and go ahead with the purchase only when you find it 100% safe.
- Know the tax implications
Just like any other Indian resident, you can also avail tax benefits basis the home loan you take to purchase an Indian property. Under Section 80C of the Income Tax Act, you can claim a deduction on home loan principal repayment of up to Rs.1.5 lakh and a deduction on home loan interest repayment of up to Rs.2 lakh every financial year under Section 24 (b). Apart from this, as a first-time homeowner, you can claim an extra deduction of Rs.50,000 under Section 80EE.
Don’ts of investing in Indian real estate industry
- Fall for marketing tactics
While researching a property you want to buy, you should evaluate it based on its location, specifications, and amenities. You should not rely on advertising or marketing material and shouldn’t ever blindly believe an offer without looking at the fine print closely. Moreover, be sure to compare market standards with what the builder is offering to understand if you’re getting a good deal.
- Avoid unknown developers
There are many fraudulent builders and developers who are looking to make a quick buck. Therefore, you should be aware of the Indian real estate market and know the top builders at present. You should never trust an unknown builder by depending solely on their offer. Apart from researching the builder’s other projects and website, you must ensure it has the required approvals as well as licenses for all its projects.
Now that you are aware of what to do and what not to do while investing in India, you can get started on your investment. For example, if you are looking for flats for sale in Mumbai, you can choose to invest in Lodha Palava City or if you are planning to invest in Bangalore, you can buy a house in Sobha Dream Gardens. Once you decide on the property of your choice and are ready to avail a home loan for it, you can check your pre-approved offer from Bajaj Housing Finance Limited to ease the borrowing process.