Features Influencing NRIs’ Decision to Invest
There are several factors that continue to attract more NRIs to invest in the Indian real estate market:
— Property prices — a correction in property prices over the past few years has given NRIs greater power to use their savings to invest in properties.
— Location — it isn’t only the bustling commercial cities attracting NRIs; Tier II and Tier III cities are also full of lucrative options.
— Commercial real estate — NRIs are increasingly attracted to commercial real estate as it offers impressive capital appreciation and rental yields.
— Weakening of the rupee — NRIs can buy property in India at a comparatively cheaper rate because of the weaker rupee, an advantage for people earning in foreign currencies.
The Benefits of Investing in Real Estate
Here are some advantages that come with investing in Indian real estate:
— Retirement plan — most NRIs plan to return to India after retiring, and commercial real estate can provide a source of income for life after retirement.
— Return — returns from real estate can’t be compared to returns from many other investments, with average returns going up to around 10% within a few years.
— Financial portfolio — property is a rewarding source of asset creation and capital enhancement, adding to overall yield through capital appreciation.
— Rent — NRIs often invest in real estate and lease those properties, adding a source of steady cash flow, particularly with long-term commercial leases.
— Multiple benefits — real estate investment in India comes with several tax exemptions under different sections of the Income Tax Act.
— Long-term income — NRIs trust Indian real estate as a strong future income choice due to high return rates and secure cash flow, particularly in the commercial sector.
Ways to Invest
Investment in real estate can be made in several forms — by directly purchasing a property, receiving it as a gift from a resident Indian or an NRI/OCI relative, or through inheritance from an Indian resident or non-resident who acquired the property in accordance with the provisions of the Foreign Exchange Act.
“There is no restriction on the number of properties that an NRI or OCI can hold.”
Conclusion
Due to COVID-induced lockdowns, the real estate investment rate declined for a period, but sales have since improved following the enactment of RERA. NRIs usually buy property in India with the primary objective of investing or using it for rental purposes, making it an ongoing opportunity for NRIs to build suitable benefits in the country.