Nri Corner

When considering real estate investments, NRIs should carefully evaluate which segment aligns best with their financial goals and risk tolerance. Commercial real estate presents an attractive option due to its potential for long-term high returns and appreciation. Additionally, commercial properties typically boast high resale values and experience fewer disputes compared to residential properties. Moreover, there's often more flexibility for negotiation on rates in the commercial real estate market. Furthermore, the influx of institutional investor funds into commercial properties reduces the likelihood of delays in projects, making it a favorable choice for NRIs seeking stable investments.

Several cities in India have given promising returns on real estate investments for various reasons in the past. Delhi-NCR stands out due to its combination of low supply and high demand, driving property values up. Investing in commercial properties near metros, like in Delhi, ensures good returns due to high foot traffic and accessibility. Cities with a large and stable employer base, such as Bangalore and Hyderabad, provide stability and consistent demand for both residential and commercial properties. Tier 2 cities like Faridabad, Ludhiana, New Chandigarh, Prayagraj etc. are emerging as lucrative markets, offering affordable options with improving infrastructure and increasing job opportunities, attracting both investors and residents alike. Additionally, government initiatives aimed at creating business and trade centers in Tier 2 cities further boost investment prospects by stimulating economic growth and development.

Investing in real estate is particularly advantageous at the present moment for several reasons. Firstly, the weakness of the rupee enhances the purchasing power of investors, making real estate more affordable. Secondly, loan rates are currently at their lowest point in fifteen years, facilitating easier access to financing for potential buyers. Moreover, alternative investment options such as fixed deposits offer lower returns, and the stock market's instability makes real estate a more attractive and stable investment avenue. Additionally, with expectations of a rapid recovery in the Indian market, investing now could potentially yield significant returns in the future. Lastly, partnering with reputable developers at this opportune time ensures that investments are made wisely, maximizing the potential for long-term gains.

Investing in real estate in tier 2 and tier 3 cities presents a lucrative opportunity for several reasons. Firstly, these cities are considered emerging markets, offering substantial growth potential for investors. Rental rate differentials in these cities compared to metros are significant, providing attractive rental yields for property owners. Additionally, the shift towards remote work due to trends like work from home has increased the demand for larger homes in these cities, further driving up property values. Evaluating builders based on their post-delivery services, especially during the challenges posed by the Covid pandemic, ensures a reliable investment. Moreover, the rising demand for rented homes in tier 2 and tier 3 cities offers a steady income stream for investors. Lastly, government initiatives aimed at creating business and trade centers in these cities contribute to their economic growth and make them desirable destinations for real estate investment.

Integrated townships have emerged as one of the most sought-after segments in real estate for several compelling reasons. Firstly, these townships are typically spread across a large area, offering residents spacious and de-densified living environments, which have become increasingly desirable in the wake of recent global events. Moreover, integrated townships often boast ample green spaces, promoting a healthy and sustainable lifestyle. Safety and security are prioritized within these communities, providing residents with peace of mind. Additionally, integrated townships are designed to offer all necessary amenities and conveniences within close proximity, eliminating the need for residents to travel far for daily needs. The growing demand for larger homes is effectively met by the spacious layouts often found in integrated townships. Furthermore, these communities foster a walk-to-work/entertainment culture, promoting a sense of community and enhancing overall quality of life for residents.

To propel real estate growth and stimulate the Indian economy, several policy changes can be implemented. Firstly, recognizing the significant multiplier effect of the real estate sector is crucial. Drawing inspiration from successful models in countries like China or Singapore, where housing has been pivotal in driving sectoral growth, can inform effective strategies. Additionally, providing incentives such as tax breaks, affordable land, and fiscal and monetary support can encourage investment in the real estate market. Streamlining administrative processes through initiatives like single-window clearance can expedite project approvals and promote development. In the short term, reducing GST on commercial properties can spur demand and activity in the sector. Furthermore, allowing foreign direct investment (FDI) and lowering registry rates can attract more investors and homebuyers, stimulating growth and revitalizing the real estate market.

When considering monthly rental income, investing in commercial properties tends to be preferable for several reasons. Firstly, the return on investment (ROI) is typically higher compared to residential properties, often averaging around 2% annually or more. Additionally, commercial properties generally entail lower furnishing and maintenance costs compared to residential units, thereby maximizing profit margins for landlords. Furthermore, commercial properties often boast high resale values, providing additional avenues for potential profit in the long run.

Non-Resident Indians (NRIs) are recognized under the Foreign Exchange Regulation Act, 1973. Every bank and housing finance company follows the RBI guidelines to define an NRI - "An Indian citizen who holds a valid document like an Indian passport and stays abroad for employment or for carrying on business or vocation outside India or stays abroad under circumstances indicating an intention to stay there for an uncertain duration is an NRI."

Documents required for Resident Indians and NRIs for getting home loans are different in some respects. Home loans for an NRI are available for construction of new houses/ flats, purchase of old house/ flat addition/ alteration to an existing house and repairs/ renovation etc. However, for availing home loans, an NRI have to fulfill certain conditions, according to the provisions of the Income Tax Act. They should have stayed in India for a period of 182 days or more within an assessment year or they should have stayed in India for at least a total of one year or more.

Last but not the least, NRIs should take due care while selecting their home loan provider companies or HFCs. Considering the geographical distances involved, it is significant that loan seekers associate with a proactive and responsive HFC.

Eligibility criteria for NRIs differ from Resident Indians based on several parameters:

• Age: The loan applicant must be at least 21 years old.
• Qualification: The NRI loan seeker must be a graduate.
• Income: The applicant must have a minimum monthly income of $2,000 (this may vary across Housing Finance Companies - HFCs). Eligibility is also determined by the stability and continuity of employment or business.
• Payment options: The NRI must route EMI through their NRE/NRO account and cannot make payments from other sources, such as a savings account in India.
• Number of Dependents: Eligibility is also determined by the number of dependents, assets, and liabilities.

NRI home loans range from a minimum of INR 5 Lakh to a maximum of INR 1 Crore, based on repayment capacity and the property's cost. The applicant can be eligible for:

• A maximum of 85% of the cost of the property or construction.
• 75% of the cost of land in case of land purchase.
• These percentages are based on the repayment capacity of the borrower.

The eligibility can be enhanced by applying for home loans with a co-applicant who has a separate source of income. Also, the interest rate for NRI home loans is typically 0.25% - 0.50% higher than for Resident Indians. Some HFCs have a 'negative criteria' for NRI home loans, making it difficult for NRIs from certain locations to get a home loan.

• PAN Card (Permanent Account Number)
• OCI/PIO Card (In case of OCI / PIO)
• Passport (in case of NRI)
• Passport size photographs
• Address Proof

If the PIO card is not available, photocopies of any of the following documents:

• The current passport with birthplace as 'INDIA'
• Indian passport, if held by the individual earlier
• Parent's/Grandparent's Indian passport/ Birth Certificate/ Marriage Certificate substantiating the individuals claim as a person of Indian origin.