Don’t know where to invest your savings when the stock market isn’t your cup of tea? Well, real estate is the answer.
The Indian real estate market is one of the strongest in the world. One of the few countries did not experience a dramatic slowdown or crash during the recent global recession.
Non-resident Indians (NRIs) are aware of this and opt to participate in the flourishing Indian real estate business. Many NRIs worldwide like to acquire a home in India for the nostalgia and connection to their motherland.
Investing in real estate isn’t that difficult as it sounds. Just keep a few tips in mind, and you’ll be a proud homeowner.
1. Research Well
If you are looking for a house loan, make sure you have done your homework first.
Investing in Indian real estate requires careful consideration of several factors, including the property’s location, age, and the cost of nearby comparable properties.
Banks allow NRIs to borrow 80-85% of the property value and pay it back in 5-15 years instead of 30 years for native Indians. That is because they are expected to have better repayment capacity. However, NRIs can get the same loan rates as Indian residents.
2. Select the Property Carefully
The cost of commercial property is higher than the cost of residential property. Investing in a residential property is often less expensive than a commercial property.
Commercial properties may be more advantageous if you start a business by converting a residential property to a commercial.
Consider the lengthy process of converting your property before deciding on what kind of property to buy.
3. Choosing the Right Place
Investing in residential property in Mumbai, Bangalore, Pune, Jaipur, or the surrounding tri-city area makes sense if you have a long-term perspective (10+ years).
For example, Pune has been named India’s most livable city many times in recent years.
Real estate developments in Pune have recently seen an increase in demand due to the presence of well-known educational institutions coupled with the growth of commercial centres.
Pune is a great place to buy a property because of its growing business and retail industry and its progress in social infrastructure.
New expensive residential buildings are springing up all over the city, catering to homebuyers who want a better quality of life.
4. Choose a Builder That Fits Your Needs
Buying real estate, especially outside of the city where you now live, is a significant financial commitment that should be properly considered before making a choice.
You’ll have to make a crucial decision on which property developer to work with. NRIs should do a thorough background investigation on the builder, using all accessible resources.
Connect with the developer’s representatives and solve all your inquiries and worries. Choosing a reputable builder is your best chance.
5. Tax Benefits
More than 90 nations have signed agreements with India to prevent double taxation. Income from immovable property in the NRI’s country of residence can be claimed as a tax credit for taxes paid in India.
In India, the NRI is obligated to pay tax on the amount of capital gains realized by the NRI. A long-term capital asset kept for more than 24 months receives the indexation benefit taxed at 20%.
6. Documents Required
Do your homework. Get a list of essential documents, the property purchasing process timeline, and the financial element. Required documents include passport, work permit, valid visa, wage certificate, and PAN card.
You also need a local contact and a power of attorney to a trustworthy individual, preferably your chartered accountant.
For non-resident Indians, investing in real estate is impassioned. Non-residents buy land for various reasons, including the desire to own a second home, a diversified portfolio, or just to keep ties to their homeland.
Seeking expert help can help you make sound decisions and get the best price for your property.