The Indian real estate sector is quite tricky. You need to have sound knowledge about it before investing in the right property. While the real estate sector in India appears as a sound investment tool to its residents, the Non-Resident Indian community is also intrigued by Indian real estate. There are a number of reasons for the growing interests of the NRIs in this sector particularly. Safeguarding retirement plans, the yield on investments, and better returns are just some reasons why NRIs prefer to invest in real estate in India. It is true that NRI property investment in Indian real estate has grown to a great extent. Here’s why.
No maximum cap on properties owned
As far as NRI property investment is concerned, there is no restriction on the number of properties an NRI can invest in India. According to Reserve Bank of India or RBI, an NRI is permitted to buy any commercial or residential property in India. Furthermore, an investor does not need to get any permission from the RBI for the same. However, you should know, there is a restriction on foreign investment when it comes to plantation property, agricultural land or a farmhouse. These types of properties are allowed only when they are gifted to or inherited by the NRI.
NRI investment in real estate
Financial Transactions and Funding
For any NRI investment in real estate, it is of paramount importance for the transactions to be carried out in Indian currency through Indian banks alone. All the transactions should only be done through Indian banking channels. This further calls you to use your NRO (Non-Resident Ordinary Rupee) or NRE (Non-Resident Rupee) account. Apart from this, you can even issue post-dated cheques or ECS (Electronic Clearing Service) from your NRO, FCNR (Foreign Currency Non-Resident) or NRE account.
Besides, an NRI can also get funding or financial help for the purchase, only if the paperwork is clear. If you are planning to purchase a property, and it is jointly held or inherited, ensure you get a no-due certificate. You can also get help from various home loan schemes available for NRIs. However, remember that you have to pay a minimum of 20% of the property value. An NRI can get loans from banks and housing finance companies that are registered with the National Housing Bank. As the loan is sanctioned in Indian currency, it is importance for an NRI to repay the loan amount in the same currency.
As far as documents are concerned, it is vital for the NRIs to have valid passport copies, a copy of currency, appointment letter, salary certificate, designation held and more. Now that you have all the information, ensure you invest rightly and wisely in the Indian real estate sector. Go through the NRI corner on your bank’s website for more details.