Motivations for investing in indian real estate for NRIs
By ResidenceBuy India | 0 comments | 1894 views |
Feb 26 2012
Here are some motivations for investing in Indian real estate for NRIs:
Returning to India in the future: Many NRI eventually want to return to India, so investment in property is the first step towards establishing an additional root in the place of your choice.
Investment opportunity: Indian real estate market is one of the hottest investment opportunities in the world. The rate of home ownership is relatively low India (with a significant upside potential), and combined with economic growth potential we are looking forward to a golden age of real estate growth in India.
Diversification: A typical NRI has eggs in many investment baskets to minimize the risk exposure of the financial investment. Given the downside risk facing the world economy (thus the prospect of a dismal return from other investments) it is a good idea to allocate a portion to Indian real estate market. This is more appropriate as we continue to see a decoupling of economic growth between the developed and emerging markets.
Renting benefit: Given the robust growth in the rental market in India, property investment in India has the benefit of monthly income that potentially grows over time. A healthy rental market also indicates a robust housing market, thus when you decide to sell your house you will enjoy capital gains on your investment. So buying a property to rent is like investing in fixed income securities with rising coupon and a final principal payment that is more than the face value.
Key prerequisites: Make sure that you have all the legal documents ready and all the govt. regulations fulfilled before the project starts. Otherwise the project can be mired in long legal
Economic risk associated with real estate investment by NRI: NRI faces multiple risk in term of investment in india. Here we will explore some of the risks assosiated with real estate investment in india.