Laws Prevailing NRI Real Estate Investment in India You Must Know About

India is considered as among the topmost tempting real estate investment destinations as increasing number of NRIs are investing in locations in India. As per a research by Square Yards, the overall Non-resident Indian investment in top key cities is expected to gain around USD 11.5 million in 2017. Special thanks to the latest real estate laws for making the purchasing of a property for a Non-resident Indian easier than ever before. Anyone carrying Indian passport is allowed to invest in Indian real estate except for the property which is not an agricultural land, a farmhouse or a plantation property. The NRIs are advised to understand the prevailing policies, laws and reforms well, while there is a favorable market scenario for a real estate purchase. There are some key rules to help the non-resident Indian with the process.

One of the key considerations is understanding of the financial landscape when a non-resident Indian is investing in Indian real estate. Are you an NRI and looking for investing in Indian property? Then you are just at the right place. Here you will get some of the worth mentioning tips to consider while stepping towards property purchasing.

Must know laws for NRI real estate investments

· Regulatory act: Do you possess an Indian passport? Then you do not need to seek for prior permission for making a property investment in India. The honourable Reserve Bank of India has enacted some simple but attractive laws to magnetize more foreign investments. There are rules under Foreign Exchange Management (FEMA) to govern real estate transactions.

· Types of various properties to invest in: There is no restricted number of properties for the non-resident Indians to invest in. A person of Indian origin (PIO), as well as an NRI, is allowed to purchase commercial and residential properties both as many as they want. However, this is to be remembered that there lies a restriction on foreign investment when the property is an agricultural land, a farmhouse or a plantation property. An NRI is only permitted to invest in such properties if it is gifted or inherited.

· Financial funding and transactions: Remember, every transaction related to property investments in India is required to be done through Indian banks in Indian currency. The person needs to have an NRI account in a nationalized Indian bank. If the paperwork is clean, an NRI would find no difficulty to avail bank loans for the purchase. Under several financial institutions in India, there are a number of NRI home loan options that are offered. In case you are getting your property funded, then make sure that you own minimum 20% of the property value to invest of your own. Remember you are allowed to take maximum 80% of the property value.

· Power of attorney: You are required to give power of attorney to a trusted associate or to your builder, in case you are purchasing a property under construction. You are advised to take the support from your lawyer to word the document aptly making your investment secure and leaving no chance of forgery, while the property is being developed.

· Tax benefits: Even If you are a non-resident Indian, you’re allowed to relish most of the tax benefits that an Indian citizen enjoys. It is considered as the short-term capital gain and the earnings through the taxable properties only if you sell the property within three years of purchase. But in case you sell the property after three years, you will have the choice of reducing the long-term capital gains by investing in another property.

CREDAI, The Confederation of Real Estate Developers Associations of India organizes exhibitions for non-resident Indians on a regular basis. It helps them to go through various investment options that come with spot loans from top banks. Easy investment options along with reduced down payment value are also offered. Therefore, it would be better if you crosscheck all the given offers from CREDAI before investing in real estate in India.

If you are an NRI and planning for investing in real estate in India then it is wise to go through the rules carefully to avoid unwanted mess before making a purchase.

A Guide for Single Home Buyers

Purchasing a home for the first time is definitely a challenge as tempting offers leave you in a dilemma. Buyers often find it difficult to decide whether to go with the first house that comes within their budget or continue to rent. First time home buyers in India require following safety guidelines before signing on the dotted lines of the agreement. Some of the mentionable tips are given below that are intended to guide the inexperienced home buyers as they are about to finalize one of the most important investments in their life.

Let’s focus on the tips to have a successful purchase.

Considerations before you buy a home

• Financial planning: Before you make the decision to invest in a property it is immensely important to ensure absolute financial planning. Take the initiative by reviewing your recent liabilities such as life insurance, student loans or any other commitments to get a bird’s-eye-view of your actual monthly income. Limit your budget for purchasing a home based on your household budget and the amount of money you can afford to put aside for the monthly EMI of your home loan. Except for the EMI you need to have a healthy savings account that can support you while paying additional incidentals such as registration, stamp duty and other sundry charges.

• Your future goals and needs: If you are deciding to invest in a property then it is essential to not only have a clear idea of your present requirements but you also need to consider your future goals and needs. Some of the buyers seek capital appreciation through a long-term investment, some of the buyers just want a perfect home for the family, there are some buyers who wish to be a part of the new upcoming complex, and some desire to move closer to their workplace. When you are investing a huge amount of your hard-earned money you need to be clear about your future needs and goals, and to ensure that you make an informed choice. 

• Research location: Location is another chief factor to consider before you make an investment. It is always wise to purchase a high-growth area where there is enough potential for capital gains and growth. Keep things in mind for considerations such as proximity to educational institutions, connectivity to business area, shopping malls and hospitals. You are advised to be prepared for your financial targets which may have a detrimental or positive impact on the predicted price of your property. Make sure that the location of your new home suits your budget and personal requirement. 

• The credibility of the builder: This is considered as one of the important factors to check while making investments. Before buying a property, the buyer must look into the credibility of the builder. This essentially stands for checking on the developer’s previous projects, rate of appreciation in value, quality of construction, number of future projects and current demand in the market. The purchaser would be beneficial if the developer is affiliated with a governing body such as CREDAI. 

• Allotment letter: Have you selected your property and paid the first installment? If yes, then your builder may soon give the allotment letter to you. This allotment letter contains details about the property that has been allotted to you. 

• The sale deed: It is to be the most valuable document in a buying process of a real estate. The sale deed is an essential document which is governed by the registration act for both the seller and the buyer. Until the sale deed is signed between the seller and the buyer, the sale or purchase of the property is not legally completed. 

Above are the key factors which has to be considered while purchasing properties. A healthy mix of the above considerations will definitely guide you towards your ideally located home.

Key Criteria To Consider While Investing In Real Estate

Investing in the real estate market is quite intricate as compared to the other investment options. For this reason, it becomes essential for an investor to consider these essential criterions while investing in the real estate sector.

1. Location–The location of a property is pivotal in determining its present worth and future prices. Also, if you are an end user, then you should opt for the location that has proximity to basic amenities, which is peaceful and safe, surrounded by greenery, and offers convenient access to various modes of transportation.

2. Total Valuation of the Property–The valuation of a property comprises major elements that may influence the price of the property. This includes the listing price, investment analysis, taxation, insurance premium, and other market-related factors. So, make sure you invest only in a property that has positive net worth.

3. Purpose – This is another major factor to consider. You should be clear about your end goal from a property: whether you are buying it for investment or for end use. But no matter what the purpose is, it is essential to select a property that can fetch you appreciations in the long run.

4. Have Detailed Knowledge of the Leverage–It is essential to consider the total loan amount you can avail and the available sources of income with which you can pay for it. Loans are convenient, but they have a huge cost associated with them. So, consider all the possible risks and learn all the ways to handle the loan so that you can benefit from it and get the maximum advantages.

5. Check for the Company’s Reputation – Another important criterion to consider is to invest in a company that holds a sound reputation in the market like BramhaCorp Ltd. in Pune. It is important that you invest in a developer or builder that can provide you with the project as per the decided timeline, and is known to offer high construction quality.

6. Property Taxes – There has been a lot of evaluation and alteration regarding the taxes implemented on the property. You may not be aware of all of them. In such situations, it is important that you gain complete and updated knowledge about taxes levied on a property. If you find that the tax is higher than what you are aware of, then ask for the justification.

7. Investment in Existing or New Constructions–New constructions are always offered at attractive prices, but they have risks associated with them, like delay in possession, increased costs, lack of neighboring surroundings, and more. Properties on resale involve lots of check on documents, ownership, and legal matters. So, consider these factors before you take the final decision.

Real estate investments offer high ROI but have some risk associated with them, you need to choose a property at a thriving area and from a trusted brand. Be thoughtful and make a logical, intelligent decision of investing in real estate only after considering the above mentioned key criteria.

10 Mistakes To Avoid During Home Inspection

Home inspection is one of the most important steps while purchasing any real estate. It ensures that the home is safe to live in and worth your money. It’s important to inspect your property for any hidden problems or structural defects so that it doesn’t turn into a money pit.

Here’s a list of some of the common home inspection mistakes one should avoid:

1) Choosing the wrong inspector: While hiring a home inspector, keep in mind that you are choosing a professional who will do a full physical check of your investment. Choose someone who is trustworthy and competent. Most buyers generally choose on the basis of who charges the lowest. It’s better to look for options and check the credentials, licensing and affiliations of the inspector.

2) Not getting a property inspected: It’s important to gather complete information on the builder, its property and value of the property. Just because a home has passed all legal formalities doesn’t mean it is problem free. Make sure to get everything (inside and outside) inspected. Do not skip the inspection just because the property looks good or is newly constructed. Builders or contractors may sometimes overlook things. For your assurance, ensure everything has been inspected before you purchase.

3) Not participating or being present during the inspection: It is okay to let the inspector do his job but it is also important to meet him regularly, discuss about your checklist, and visit him at the property to check firsthand if the issues discovered are big or small so as to avoid unnecessary spending later on.

4) Ignoring the inspector’s recommendations: Sometimes, issues found are not taken seriously due to the cost factor. These issues may also get ignored during negotiations. As a buyer, it’s important to consider all issues and take a follow up on items discovered during the inspection before investing. It’s always better to be safe than sorry.

5) Not using home inspection results as a negotiating tool: A good inspector will always guide you on what can be replaced. Try to consider such points while negotiating repairs and price reduction from the seller. Home inspection is not just a step in home-buying process; you may use the inspection results to your advantage and negotiate a better deal.

6) Ignoring the Exterior Problems: Most of the home inspectors only consider inside of a home missing on problems beyond the interiors. This may leave you tackling with exterior problems like fences, rooftops etc. Repairing these elements at a later stage will cost a lot.

7) Not making a checklist: Home inspectors usually don’t inspect pipelines, tanks, sewerage systems. Add such items to your checklist while buying a home. If your inspector is unwilling to inspect these elements, it’s better to look for another inspector.

8) Relying on Real Estate Agents for Referrals: Real estate agents often provide referrals for home inspectors so as to help clients. But relying on real estate agents for recommendations may not be the best bet. These home inspectors usually ignore faults at home to return a favor to the agent. It’s good to do research and select your agents wisely.

9) Not doing enough research: Rushing to a decision may prove to be harmful at times whether it is while buying a home or getting it fixed. Do your research thoroughly to avoid any home inspection mistakes.

10) Signing the contract before the inspection: A home buyer can exercise the right to have a property inspection at any stage during the sales process. There is no need to wait till a contract has been signed. Remember, an offer can be negotiated as per the outcome of an inspection report.

It is important and essential to complete your research, make wise decisions and take adequate measures to find a competent home inspector and avoid unnecessary chaos and expenditures while buying a home.

Effective Tips for The First-Time Home Buyers

Buying your first home can be both exciting as well as stressful. Keeping in find a few crucial pointers can help ease the stress level and make the overall activity of researching and buying less time consuming.

Following are few effective tips/suggestions to help you get your dream house with less worry and more happiness:

1) Know your ideal price range:
It’s important to draw up a budget and stick to it while looking for a home. If you like a house but its monthly payment is more than you can afford, it’s better to move on. You may take guidance from your bank’s loan officer to arrive at a figure. He/she will be able to tell you the maximum amount the bank can lend and the interest rate. Though not accurate but you will be able to get a rough estimate of the price range that you can afford.

2) List down your non-negotiable features:
Starting from locality to space to amenities, make a list of features that you will not compromise on. Visit homes that are in, below and above your budget limits. Study how price differs with features, amenities provided and locality. Re-evaluate your list to what you are really looking for.

3) Contact a good real-estate agent:
Contact a realtor who knows about the area, the neighborhood and the market. A good realtor will save your house hunting time, will show you the options as per your requirements and in some cases will also guide you with his contacts of loan officers and real-estate attorneys, pre-informing you about all the documentation/approvals required.

4) Be flexible:
Be flexible with your closing date. Sometimes, may be the seller requires more time. It’s okay to be flexible while negotiating else a good option may just slip away from your hands.

5) Study the future prospects of the house:
Try knowing about the rate of appreciation of the house till date and its prospects for future. Figure out the future developmental plans and amenities of the locality.

Keeping in mind these tips and doing a little bit of research may change your nightmare of buying your first home into an exciting reality.