Luxury Lying Vacant: How To Cash In On Your Ancestral Property

When high-networth individuals (HNIs) of the Indian origin move to other parts of the world, it's not just the cash that flows in another direction. In many cases, these rich individuals leave behind properties worth lakhs and crores of rupees lying vacant behind them. With apprehensions about legal issues and encroachments, cashing in on their pricey real estate does not seem an easy task for people living abroad. In fact, many prefer to rent out these prime properties below the average rates, as selling does not appear a promising option.

However, all is not bleak. PropGuide looks at the ways in which you could monetise such assets.

Outright sale

If you live outside of India, frequent trips to the country may not be a viable option. In a case like these, an outright sale of your ancestral property is the best way. This option provides you ready money that you could use to invest elsewhere or buy a property in the country you are residing in at present.Remember, yours is a prime property and finding the right buyer would mean half the battle has been won. To achieve this, invest more time in finding the right buyer, and let the long period in doing so not discourage you. You may have to contact many people before you find the right buyer who would value your asset like you do. While you may recruit advisors in India to help you find a buyer, there are a number of online portals that could help you bag a good deal without paying any hefty amounts. Also take into account the taxation aspect of the deal and charge the buyer accordingly.

While plots on which independent bungalows can be built may be easily sold in this manner, this may not be the ideal mode for plots with vast areas suitable for group housing projects.

Joint development agreement

Another way to monetise your ancestral property is to enter into a joint development agreement (JDA) with developers. A popular mode these days, a JDA is beneficial for both parties – while it helps developers with the cash, owners find the worth of their assets increasing. In a JDA mode, the revenue might be shared between the developer and the owner in a fixed proportion. The amount that an owner receives in a JDA model is typically more than what he may get through an outright sale of the property.

The owner also has the option of taking a share of the developed property instead of taking a proportion of sales proceeds. For example, the developer and the property owner might decide that of the total number of flats to be constructed on the property, half would be kept by the developer, and the other half by the owner. However, before you enter into a JDA, make sure the developer has a good track record.