NRIs Should Keep These Things In Mind While Purchasing A Property In India; A Buyer’s Guide
Things For NRIs To Take Into Account While Buying Property in India: The real estate sector in India is picking up and seeing a fast recovery on the back of higher demand. According to a report from Anarock, housing sales grew over 40 per cent across seven major cities in Q3 2022 as compared to the corresponding quarter of last year and predictions for the fourth quarter are also bullish, owing to the positivity from the festive season imbued into the market.
Vikas Wadhawan, group CFO of Housing.com, PropTiger.com & Makaan.com, explains for NRIs what they need to take into account while purchasing a property.
1. How To Choose The City
In most cases, property is purchased for investment purposes. This means only a city with great scope for rent appreciation must be chosen. This makes growing TIER-II cities the right candidate.
(NRI very often buy properties for their parents who are still in India so that also is an important consideration for deciding where to buy)
2. When To Buy — 10-15 Years Before Retirement Or Just Before They Come Back To India?
You get to know the full advantage or the disadvantage of a property over a period of time, whether bought for residential or commercial purposes. This means buying as early as possible makes better sense. If need be the property could be later sold and a new one with better prospects must be purchased.
3. Advice Around Choosing Type of Property: Independent House/ Villa, Apartment
Depends on what exactly you are looking for in your property. While villas and independent bungalows make more sense when it comes to freedom, apartments score a lot higher in terms of ease and convenience. Not to mention the community aspects of living. While the former would invariably cost higher, flats are a more cost-effective option, and they are also low maintenance.
4. Ready-To-Move-In Or Under-Construction?
If you are investing with a trusted developer who has an impeccable track record, under-construction properties are good since it may be more cost effective. Otherwise, ready homes are a safer bet.
5. What Are Some Of The Challenges NRIs In Particular Face? Advice On Each
There are additional legal aspects NRIs have to take care of in terms of what they can or can not purchase. The tax liability is also different. They will be better off with expert assistance on both these aspects since additional laws become applicable on NRI investments.
a. Shortage of time during their visit to India which results in improper due diligence
Use power of attorney to give a competent and trusted person the due diligence for you since doing back and forth again and again may not be possible.
b. Maintenance of property
Again, give power of attorney to a competent and trusted person to manage your property for you. Off late there are many start-ups who manage your rented properties on your behalf. You may also choose to appoint one of them to manage the renting and maintenance of your property and keep providing you updated reports.
6. Mistakes That NRIs Commit When Purchasing a Property
Ignoring tax and legal aspects of the purchase are some of the most common mistakes NRIs make. They become more susceptible to frauds by depending unduly on non-professional sources when making investment decisions.
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