3 Rules An NRI Investor Must Follow
This could be the best time for the non-resident Indians to invest in properties at home ─ an upcoming law would guard them against the wrong-doings; a new tax system will further simplify things; the government's push towards affordable housing will make the deals much sweeter; on top of it all, the Indian currency has been falling against the dollar. For the reasons mentioned above and many more, it is hard to resist the charm Indian real estate is oozing currently.
While you are going for it, we suggest you ask yourself these three questions and go forward only after having a satisfactory answer. This would ensure your investment remains risk-free.
Who is your developer?
It would become a lot safer to invest in India's real estate after the Real Estate (Regulation &Development) Act, 2016, comes into force on May 1. As the law mandates all developers to be registered with the Real Estate Regulatory Authority (RERA) to do business in India, umpteen small and medium players would cease to exist. Real estate would become a field where only serious players would be allowed to operate. However, it would only be safer to stick with the trusted names; this does not mean buying properties only with the big names which charge a premium from buyers because of popular brand tags. A not-so-big developer should do just fine if he has been a performer. Also, do look at the track record developers which could be very location specific. For instance, if you want to buy a flat in Bengaluru, a local developer could be a better choice.
Also read: How NRIs Can Invest In India
Who is your advocate?
The law does protect you from all sorts of crimes but as we all know prevention is better than cure. This is why it is imperative you trust only your near and dear ones with the responsibility of managing your property in India. There have been multiple reported cases in the recent past where landlords living abroad have been duped by their representatives in India. Be mindful of the fact that your representative could misuse the power of attorney (POW) and dupe along with you other parties, too. This is why it is best to bestow only upon the trusted ones the responsibility. In case you feel your relatives cannot be trusted with the job, you can hire people for the same. Even if you have to pay them, there are no risks surrounding your property.
Also read: 5 Reasons Why Young NRIs Invest More In Indian Realty
Who is your tenant?
Your representative found you a fine tenant, who has agreed to pay you a handsome rent. You spoke to the person on phone and think him alright. You do think it would be better to personally meet the tenant but it is just not possible for you to visit your home country any time soon. However, we still suggest a personal meeting with your tenant. Telephonic conversations are not enough as far as business alliances that have legal implications are concerned. There have been media reports suggesting the premises of a leading actor were used to run flesh trade in Mumbai. This only points towards the gravity of the situation. A thorough inspection should be done before letting out your property.