Invest in Real Estate: The Best Places to Invest in India
How can NRI invest in real estate in India?

How can NRI invest in real estate in India?

Ritika | 2022-08-05

India being a highly growing economy is on the top list for investment purposes. Not only are residents of India who are interested in investing in real estate properties here, but the growing real estate business in India is luring NRIs towards it for investment motives. However, with the pandemic which has shaken bits and pieces of every investor around the world, it becomes difficult for NRIs to trust in and invest in a country where they do not live physically. Most Indians living abroad are scared of factors like fluctuations in the market, depreciation of property or land in a locality, and much more before they invest in it. But their enthusiasm to strike the best deal keeps them going on to invest in real estate in India.

Before they invest, there are points they need to consider which will affect their investment decision.

There are certain laws and regulations applied to NRI real estate investors in India. Like in terms of taxes, say an NRI investor has rented out a property in India, their rental income will be taxable. This law is applicable almost everywhere in the world except in one situation where a contract is signed between two countries regarding less tax or no tax.

Laws set by the Reserve Bank of India has set some rule applicable to NRIs regarding real estate investment, so any real estate transaction falls under the Foreign Exchange Management Act (FEMA). This includes, the acquisition of property or immovable land in residential, commercial, or retail is allowed except agricultural, farmhouse, or plantation property. However, there is a way out of it. You can acquire agricultural or plantation land if it is inherited or gifted to you. 

Certain payment rules are also in place for NRIs. First, payments can be made through normal banking channels only. 

Second, travelers' cheques or foreign currency notes are not allowed. The last, payment outside of India is not allowed.

Now coming to the part on how NRIs can invest in real estate in India, there are a few ways that have proven to be in line with growth and development for all.

1- Right Long term Investment:

India is an attractive nation in terms of investment opportunities and growth as it has a growing economy challenging every investor out there to take a risk and explore their field. Especially in urban areas, the demand for properties is on the rise which makes it an even more competitive and profitable business for Indian investors and NRIs. Therefore, whether you reside in India, or live outside of the country, you are sure to get good returns in the long run if you have invested in real estate properties in India.

2- Joint Investment not an Issue:

Being an NRI, one can own property, in sole name or jointly with an NRI or Indian resident without any issue. However, if that other person is not allowed to invest, then you cannot invest jointly with them. 

3- Loan is not a bad factor, It’s a Plus Point:

Getting a home loan is never an issue for both Indian residents and NRIs. You can get home loans for land purchases in Indian currency but up to around 80% of land value. So, before you take a loan, make sure that the land valuation is done properly. Also, beware of any fraud or scams. Since NRIs leave outside of India, the chances of involving in fraud are higher. There can be fake agents who will lure NRI towards them with good-to-hear benefits

4- Commercial or Residential?

If you are looking to invest in real estate in India, but are not sure in which sector to proceed, research it first. Commercial space is always in high demand irrespective of the market situation. So think about purchasing office space and renting it out to gain long-term returns.

5- Residential Will Suit You:

If investing in commercial space is not your area of expertise, then purchasing a residential property and renting it out to tenants will also help you gain profits as it will ensure regular income. Therefore, if you are not using your house or office space, think of renting it out. You can use that rental money to invest more in properties back in your homeland and earn a huge amount of money.

6- Picking up correct location:

While NRIs are not allowed to invest in agricultural or plantation land, they are given plenty of options to invest in the residential, commercial or retail sectors. Choose your location wisely for investment and this will lead you on the path of growth. You will get to choose spacious apartments, luxury bungalows, and so on.

Final words:

One who is staying within the country has access to information and tools to make a wise choice of investment in real estate and gain benefit from it. However, for NRIs, it becomes difficult sometimes to locate the best deal and grab it on time. However, there is a one-stop solution to this problem. Always look out for the property Expo, which reveals all the best property projects you can invest in and gain profits. This will be a legitimate source of information for you free from any scammer.

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