The COVID19 situation has driven global uncertainty. From businesses being affected to job loss, let alone the health scare, people are battling insecurity everywhere. This has given rise to the interest for non-resident Indians to consider returning to the country or at least invest in immovable property back in India.
Property investments for NRIs may appear an overwhelming task on the surface. However, with relaxed norms and new regulations in place, this task has been simplified. So, how’s the outlook for NRIs interested in purchasing investment property in India? Are there legal provisions facilitating this purchase? What are the rules and regulations one must be aware of, at the time of planning a property purchase?
If you are seeking the answers to these questions, read on to know it all.
Is property investment in India profitable for NRIs?
The depreciating value of the Indian Rupee against the US Dollar is one major factor facilitating NRIs in investing in Indian real estate business. Additionally, the demand for real estate in India continues to make this a lucrative investment option for NRIs. This has been boosted by the formation of RERA and developers and properties that are registered under RERA
To top it all, India is currently being viewed as the next major production hub. NRIs interested in tapping this opportunity can now make their next property investment move.
If you too were undecided yet, you can make a property investment now – provided you are looking at:
- Boosting your rental income
- Creating a home you can move to
- Making the most of the current real estate market
It is safe to buy property in India
at the moment and profitable too. That’s due to a visible boost in the market, especially in the ready-to-move-in properties sector. This has led to a surge in the queries from NRIs who are seriously considering making purchases here.
But, before you start looking to buy properties in Delhi NCR or Pune, here’s what you should know.
Property in India: Eligibility Criteria for NRIs
Residential Property Purchases in India
- For NRIs looking to buy property in India, there’s no restriction on the number of properties one can purchase – either residential or commercial.
- However, to buy plantation/agricultural/farm lands, an approval from the RBI and the government is a must.
- NRIs are eligible to apply for home loans. There’s no cap on the number of loans one can take. However, the loan amount (once sanctioned) will not be credited directly to the account of the NRI but will be disbursed to the seller of the property or the developer’s account.
- The loan amount is disbursed in Indian currency and the repayment has to be done in Indian currency only.
- To ease the task of buying a residential property in India, there’s also the provision for an NRI person to authorize a friend or a relative by giving him/her a power of attorney (POA). The POA holder can make transactions on behalf of the NRI to complete the purchase process.
- The purchased property can be easily rented out. There’s no legal approval required for this purpose.
- For repatriation of funds, the guidelines underlined by the Foreign Exchange Management Act (FEMA) must be met.
In the wake of the pandemic and organizations facilitating work from home (WFH) for most professionals, the scenario has quite changed from what it was in the beginning of the year. Irrespective of whether you want to buy from properties for sale in Mumbai or from a host of residential properties for sale in Bangalore
, you must look at the current trends that indicate:
The rising demand in co-working spaces
If you’re interested in buying a commercial property in a prominent destination such as Bangalore, Mumbai, Gurgaon, Hyderabad, Ahmedabad, or the NCR, investing in co-working space would be profitable. That’s because, with WFH and remote working now becoming commonplace, companies are avoiding incurring huge investments in the form of leases and rentals. Rather, co-working spaces, equipped with amenities, are becoming popular. This rise in the demand has driven this sector to feature as one of the topmost preferred property types for investment. Consider the location, in-house facilities, and the space (area) while making a purchase.
The preference for co-living spaces
Similar to co-working spaces, end-users are now looking at staying in co-living spaces rather than independent houses or flats in bigger apartments. Other than the affordable price, co-living areas are also preferred for their amenities and location. As people with shared interests live in these spaces, there’s a lot of familiarity and comfort for the residents living there. So, if you are planning to buy residential property in India – you could consider investing in a co-living space for better returns.
The average rate per sq. ft. as on September 2020.
Logistics and warehouses
Another property type that’s gaining popularity in India is warehouse. Be it Delhi or Mumbai, warehouses and logistics realty are the best bets for property investors looking at securing a steady source of income. Due to the pandemic and increase in online ordering and delivery, the scope and demand for warehouses has increased by manifolds. Besides the metropolitan areas, Tier 2 and Tier 3 cities are also wonderful options for warehousing projects. With several ecommerce organizations also operating out of these areas, warehouses are now becoming popular rental and long-term lease options for property owners.
The last popular trend worthy of your consideration is investing in a ready-to-move-in property. With the current scenario not showing signs of abating any time soon, end-users are looking for living spaces that have separate study for kids and work stations. However, the catch is, rather than wait for a few years to gain possession of the property; users are looking at moving in immediately. With cheaper property rates and outskirts locations becoming popular hotspots, investors are lapping up at ready for possession properties in India.
Consider these trends while you make an informed property-buying decision as an NRI. Irrespective of whether you want to move into the property or use it for rental purpose – investing in both residential and commercial estates are equally profitable these days.
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