Investment

OYO appoints Rohit Kapoor as head of its New Real Estate Business

OYO appoints Rohit Kapoor as head of its New Real Estate Business

December 29, 2018 in Investment News, Real Estate News

Hospitality chain OYO Hotels & Homes has named former Max Healthcare senior executive Rohit Kapoor as the head of its new real estate business, the Gurgaon-headquartered company announced on Tuesday.

The appointment, effective December 6, will see Kapoor spearhead new real estate business opportunities for the company, which will include exploring new domains and categories, and other strategic initiatives, according to an official statement.
“While we continue to grow our hospitality business, new real estate initiatives such as this will play a key role in driving the next wave of growth at OYO,” Ritesh Agarwal, OYO Group Chief Executive, stated in the company-issued release.

Kapoor, who will report to Agarwal, will be responsible for growing OYO’s business in India as well as across international markets, through strategic partnerships and investment opportunities, the statement added.
“From one property in Gurgaon, to now over 12,000 franchised and leased assets in over seven countries and 500-plus cities, from budget hotels to its more recent foray into resorts business, and most recently its bold entry into the housing business, makes one thing really clear, this place is the perfect combination of ambition and ability,” Kapoor said.

Prior to joining OYO, Kapoor was the executive director and a member of the board at Max Healthcare, a joint venture between Max India and Life Healthcare, South Africa.

“With Rohit taking on this mantle, we are confident that he will be able to help OYO Hotels & Homes set new benchmarks in the accommodations business and evaluate new opportunities in the real estate industry,” Agarwal said.
According to the press statement, prior to his stint at Max Healthcare, Kapoor, an Indian School of Business alum, spent close to a decade with McKinsey & Company as a consultant.

SoftBank-backed OYO has emerged as one of the largest hospitality chains in the country but has announced its entry into a number of new categories, apart from the budget hotel segment. Last month, it launched OYO Living, the long-stay managed home rentals space.

Kapoor’s appointment follows the company’s announcement earlier this month, naming former IndiGo President Aditya Ghosh as its chief executive for India and South Asia.
Additionally, the company, which now counts China as a home market, alongside India, has brought on board several well-known executives from leading consumer internet ventures, to lead its operations in the world’s second-largest economy.

Last week, ET was the first to report that OYO had hired Wilson Li as its chief financial officer for its operations in the country. Prior to joining OYO, Li used to be the finance and operations head at a listed car rental major Car Inc.

Separately, it has also brought on board Google and Uber executive Jia Zou as its technology head and Tony Liang, formerly with Wanda, SF Express and Dianping, as its chief human resources officer.

In an interview with ET, Agarwal had said that OYO, which was valued at $5.5 billion post its last ending round, currently manages 1,80,000 rooms across 4,000 leased and franchised properties in China. The six-year-old company manages 1,49,000 rooms in India and South Asia.

Sources: ealty.economictimes.indiatimes.com

Office leasing dips 46% q-o-q in NCR in Q3 2018: Report

Office leasing dips 46% q-o-q in NCR in Q3 2018: Report

November 24, 2018 in Investment News, Real Estate News

The National Capital Region (NCR) witnessed an overall leasing of 1.72 million sq ft, a decline of 46% quarter-on-quarter, according to a recent report by Colliers International.

The gross absorption was recorded at 7.65 million sq ft in the first nine months of 2018, the company said in a media release.

“Despite a quarterly decline in leasing across NCR, the year-to-date numbers indicate notable growth of 31% at 7.6 million sq ft. The last quarter will gain momentum with the year expected to close at 9.7 million sq ft against 7.9 million sq ft in 2017, said Sanjay Chatrath, executive director (NCR), Colliers International India.

The office market in Delhi recorded gross absorption of 0.14 million sq ft in Q3 2018, representing a quarterly contraction of 6.7%. Over the last three quarters, the continued decline in demand can be attributed to a lack of Grade A space in major micro markets such as the CBD and Aerocity.

In Gurugram, due to slower decision making on the part of occupiers, gross absorption declined 60% quarter-on-quarter and 50% year-on-year. With most occupiers expanding operations in Gurugram, it noted leasing activity of 0.80 million sq ft in the said quarter.

Noida recorded gross absorption of 0.78 million sq ft in Q3 2018. “Compared to the same period last year, leasing has increased by 30% as the average deal size expanded three times to 70,874 sq ft, the report said.

“The engineering and manufacturing sector was the leading occupier in Noida with 38.5% of gross absorption followed by technology occupiers on 32.1%, and the banking, financial services and insurance sector (BFSI) on 23.5%,” said Chatrath.

Sources: realty.economictimes.indiatimes.com

Which is a Better Investment: Real Estate Or Stocks?

Which is a Better Investment: Real Estate Or Stocks?

November 21, 2018 in Defination, Investment

There’s always a long-standing debate among investors on whether property makes a better investment proposition to shares. There’s no denying that the stock market historically outperforms other types of investments. And if you have to choose between investing in real estate and stocks, it might seem like a no-brainer.

Some people think the stock market is the better alternative because the real estate market is unstable at its best. There’s no guarantee that property values will appreciate from year to year and when home price gains slow or decline, investors take a serious hit. The stock market isn’t much better, it’s known for its volatility and there are unpredictable ups and downs.

Without a doubt, stock market investing offers an unparalleled ease. You can invest in stocks with as less as Rs 500. It can be done in the comfort of your home. The case with real estate is different. You have to go and survey the property, inquire about the locality and go through a lengthy process, including government regulations, to invest in it.

Each investment options provide a range of benefits. Real estate and equities, both are a great source of investment and help build wealth in the long term. Success in investing in these assets depends on the knowledge of the asset, inclination and attitude of individual investors and understanding the key drivers of the prices of these assets. Regardless of your asset class, returns are determined by different factors that generate different benefits. It’s important that you investigate and consider investing in both real estate and the stock market for different reasons.

Let’s look at these benefits in more detail and what to consider before you invest:

REAL ESTATE

  • A real estate is a tangible asset. It can be a land or a property that you can see, feel and utilize. It can provide a better quality of life. Moreover, before your purchase, you can inspect the property if it is in good condition to make sure that what you are getting is worth your hard-earned money.
  • Complete control over your investment in real estate is possible. The decision to rent it out to generate passive income, to make repairs or improvements and to sell it in the future is in your hands.
  • The value of real estate properties appreciates over time. It is one of the rare assets that rise with inflation. Even during tough times, it is less volatile. When the economy is down, you can still relax in your home.
  • A property is a source of satisfaction. You can take pride in its ownership. Since it is tangible, you have a constant reminder that years of hard work definitely pay off.

 

STOCK MARKET

  • Stocks are low maintenance. Investment in it can be left alone after the initial purchase and it will still pay out dividends. Because it requires less work, you can focus your attention elsewhere with confidence that your investment is still moving.
  • Investing in stocks is doable even for young investors. It is even preferable to start young to maximize its potential growth. Shares can be inexpensive and you can determine its volume.
  • When you buy shares of stock, you buy a piece of a company. The returns you earn is invested in prominent and are persistently successful, companies can certainly be of considerably high value. And historically, stocks have a high rate of return.
  • With stocks, you can invest not only in your own country but even in different countries and in various sectors.

Why Real Estate is still the best investment class?

When one wishes to invest his or her money in a place wherein a long-term viability and return on assets are at a higher rate, real estate investing is the best choice for you. Real estate investing provides for a more controllable amount of risks that other financial assets cannot match. It’s tangible nature also gives the investor a more peace of mind as real estate pricing seem to be more constant as compared to stock market investments.

However, there are also risks involved in this type of market. These risks could be more tricky to analyze in relation to the constant movement of the market, it can be easily affected by the performance of a particular neighbourhood that could endanger your credits where the property is situated, the need for a larger capital to actually invest in the real estate industry, the nature of the property which is less liquid than other financial assets and lastly, the taxes that come along with it. Stocks and real estate are both smart investments, but the right one for you will depend on your own personal preferences. If you’re looking for quick high returns, stocks may be the better option for you.

The biggest advantage of investing in Real Estate gives you is you can buy below market, add value and rent for positive cash flow. If you buy properties right you can make more than your initial investment back before you even rent the home. Your cash flow can provide you lifetime income with no retirement calculators and you have control over your investment to increase its value.

Regardless of which one you choose, it’s crucial to ensure that you research the investment opportunity carefully. Real estate can offer great returns, but you need to choose the right property. The wrong property can lead you owing more than the property is actually worth. The same can be said for stocks. Invest in the wrong company, and you may see your investment go down the drain.

Sources: blog.zricks.com

Essentials To Know About the Property Transfer

Essentials To Know About the Property Transfer

November 19, 2018 in Investment News, Real Estate News

Nothing can match the joy of buying a Property! We all take months to finalize a property, and then invest our hard-earned money and life savings in buying a Home.

But that’s not where your Home buying journey ends. Most of us are unaware of the post-purchase paperwork that we would need to complete.

Managing the countless legal paperwork which one requires to do for buying a Home is an extremely lengthy process. One such category of legal documents is the Property tax record. Indian Home buyers are unaware about changing the records in the property records when a property changes hands. Although the Municipal authorities maintain the tax record, if the change in ownership is not done, then tax receipts are generated in the previous owner’s name.

Here are two significant aspects of the property transfer process:

Changing Name in Property Tax document
For changing the name on the property tax document, you need to submit a few documents to the Commissioner of Revenue, the post which the verification is done in 25 to 30 days. Following are the documents that you would require:
1. Attested copy of the sale transaction deed
2. Receipt of tax last paid
3. Duly filled the application form with signatures
4. No Objection Certificate from the associated housing society

Mutation of property

This is a process which helps in transferring the title ownership from the property Owner to the buyer after the property is purchased. In common language, it is also known as ‘ dakhil kharji’. It helps the government charge taxes to the new Owner of the property.

All you need to do is submit an application to the Tehsildar with a non-judicial stamp on it. The most essential document is the No Objection Certificate (NOC) for purchase case, and an affidavit for the inherited case.

Sources: blog.magicbricks.com

Dos And Don’ts For NRIs Investing In Indian Realty

Dos And Don’ts For NRIs Investing In Indian Realty

October 24, 2018 in Investment News, NRI News

Besides exercising necessary due diligence, NRIs also need to adhere to certain specific laws and regulations, while buying, selling, or renting out real estate in India

The realty market in India has always seen considerable interest from the Indian diaspora, as an investment avenue. With developers constantly striving to woo non-resident Indians (NRIs), they can choose from a variety of options, in the residential and commercial segments.

“The realty market is in the midst of a slowdown and this is the right time to invest,” says Kalpesh Patel, head – international sales, Rustomjee Group. “Developers are offering good deals and benefits such as flexible payment plans, subvention schemes, etc. Although demand still exists at the local level, buyers are playing a wait-and-watch game. NRIs must take optimum advantage of this situation,” suggests Patel.

Buying and Selling

An NRI can either come to the country and buy or sell a property or give a Power of Attorney (POA) to a relative and get the transaction done, without coming to India. NRIs can also avail of home loans in India. The documents for the loan may vary, according to the country in which the NRI is settled. Generally, the term of the loan will be 10 to 15 years, while the amount that the NRI is eligible for, will vary based on age, income, education, etc. To finance the property’s purchase, it is advisable to use a non-resident external (NRE) account, as this will help the NRI to take back the capital invested in the property when they resell the property.

Investing for the Future

“For NRIs who are on the verge of retiring and planning to settle in India, this is the right time to invest,” advises Ashwinder Raj Singh, CEO – residential services, JLL India. “Social infrastructure in most of the large Indian cities has improved a lot while civic infrastructure is also being ramped up. As more hospitals, schools and shopping malls come up and connectivity improves, it will give rise to better standards of living. This will directly enrich the quality of life after retirement,” Singh adds.

Once the primary residence is secured, NRIs can also use surplus funds, to invest in a second apartment and use it to generate rental income. However, they must be aware of all the bye-laws and regulations that apply to NRI investors, especially with respect to taxes, as rental income is taxable in India. It is also taxable in other nations, except in cases where a treaty exists between the two involved countries, with regards to double taxation, he points out.

“NRI investors should avoid projects by unknown developers. Numerous buyers have fallen into difficulty, by putting their funds in projects that lacked mandatory clearances and fell short of even the minimum standards of quality. Unless an NRI plans to visit India and evaluate projects, s/he should opt only for reputed developers. In all cases, NRIs should strictly verify points, such as the track record and brand visibility of the developer, the social and civic infrastructure available in the location, the amenities in the project and the timelines for possession, in the case of under-construction projects,” cautions Singh.

A project that is targeted towards NRIs, is no different from other offerings in the market. A property should be evaluated, purely on the basis of its location and amenities on offer, the legal validity of its title and the developer’s brand image.

Sources: housing.com

India Office Leasing Tops 32 Million sq.ft. in First Three Quarters Of 2018

India Office Leasing Tops 32 Million sq.ft. in First Three Quarters Of 2018

October 13, 2018 in Investment News, Real Estate News

With sustained interest from occupiers led by the technology sector, commercial leasing activity across India has crossed 32 million sq ft, up 7% from a year ago, across India’s top 8 property markets in the first three quarters of 2018.

Office space absorption during the September quarter rose 3% from a year ago and 12% sequentially to 10.9 million sq.ft.with Mumbai, Bengaluru, Hyderabad and NCR accounting for almost 80% of the leasing activity, said showed data from property consultant CBRE South Asia.

Occupiers from the technology sector, with a share of 48% of total leasing, drove office space take-up in the country during the third quarter. Occupiers from the engineering and manufacturing sector with 14% share were followed by co-working and business centre operators that absorbed 11% of the total leased space.

“India’s economic growth continued on its upward trajectory and real estate services along with financial and professional services sector contributed to this economic surge as it grew from 5% in the previous quarter to 6.5% during the review period. Sectors such as BFSI, engineering & manufacturing, and agile/ co-working/business centres are likely to account for a larger share in leasing activity going forward,” said Anshuman Magazine, Chairman, India and South East Asia, CBRE.

Interestingly, India had witnessed 42 million sq.ft.office space absorption in 2017, while the first nine months of 2017 had seen absorption of 30.1 million sq ft. Even as several mid-to-large-sized deals were reported in Bangalore, Hyderabad, Pune and Gurgaon, more than 30% of the transaction activity was reported in SEZ space.

Similar to the previous quarters, office space take-up was dominated by small- and medium-sized transactions. Mid-sized transactions ranging between 10,000 sq.ft.and 50,000 sq.ft.accounted for around 45% of the transaction activity, while small-sized transactions less than 10,000 sq.ft.had a 42% share.

The share of large-sized deals with over 1 lakh sq.ft. size increased to 7% during the quarter. The agile workspace sector continued to witness a strong growth momentum, with global and Indian majors expanding their footprint in tier 1 and tier 2 cities. Co-working and business operators leased about 3.3 million sq.ft.space in the first three quarters of the year, almost doubling their take-up reported in the first three quarters of 2017. Other sectors such as Banking, Financial Services and Insurance (BFSI) with 7% share also contributed to the increase in leasing activity.

“The trend of agile spaces is rising during a booming start-up era, even as corporate are drawing up fluid expansion and occupation plans. Occupiers are also expected to keep strong checks on space utilization ratios and innovation in workplace strategies while expanding their footprint and implementing their expansion plans. Also, SEZs are expected to account for a larger share of the upcoming supply over the next few quarters. Given the approaching sunset date, we anticipate an increase in demand for SEZ s space,” said Ram Chandnani, Managing Director, Advisory & Transaction Services, India, CBRE South Asia.

Pre-leasing activity rose in during the quarter, largely in Bangalore and Hyderabad, driven primarily by tech and BFSI corporates. Overall, the country witnessed more than 12 million sq.ft.of pre-commitment transactions in mostly under construction assets in the first three quarters of the year, the report said.

On the other hand, supply addition during the quarter dipped marginally by 1% from a year ago to 7.1 million sq ft. Bangalore and Kochi accounted for 60% of the quarterly supply addition, followed by Mumbai and Hyderabad. Except for Pune, Kolkata and Kochi, all cities reported a dip in development completions on a quarterly basis. Slippages were reported in cities such as NCR, Mumbai and Hyderabad.

Sources: economictimes.indiatimes.com

Why A Brand Name Is Important While Investing In Real Estate

Why A Brand Name Is Important While Investing In Real Estate

October 3, 2018 in Investment

Buying a property is considered one of the biggest financial decisions in every household. A lot of factors influence this decision and one of the key aspects is the brand name. A good brand name is an important factor that you must pay special attention to as it’s not only a matter of dignity and pride but also serves as a measure of the value of the property. Following are some of the reasons why you should opt for a builder who has an impressive repertoire and a strong brand image.

Credibility and Expertise

While you’re looking to invest in real estate, it’s important to opt for a trusted builder to avoid any sort of foul play. Their dealings are very transparent leaving no chance of financial fraud. On the other hand, chances of the property being built on an undisputed land are high with a lesser renowned builder.
There’s also the level of expertise that reputed builders come with. They have a great deal of experience and knowledge about the industry. A branded builder will offer apartments with impeccable facilities and superior aesthetics without compromising on the quality of construction.

Delivery on Time

When you’re purchasing a property from a reputed builder, you’re most likely to acquire the apartment on time. They make it a point to not disappoint their customers and ensure a timely delivery of apartments no matter what. Moreover, projects developed by reputed builders are all RERA certified. On-time handover is one of the main highlights of the RERA bill, making it even more certain that you will receive the keys to your new home on the promised date.

Greater Return on Investment

If you’re planning to sell or rent out your apartment, the brand name of the property is going to work in your favour. You are certainly going to enjoy huge revenue from it because the value of the property automatically increases when it comes from a branded builder. Additionally, reputed builders always develop properties in either upcoming localities or well-established areas, with emphasis on good social infrastructure and connectivity. With all these boxes checked, you are guaranteed to enjoy higher ROI.

Ease of Home Loan Sanctioning

A reputed real estate brand comes with the added benefit of easy loan sanctioning. If you’ve invested in a property that has been developed by one of the leading and most popular builders in the market, then the chances are high that your home loan gets sanctioned without much hassle.

Most reputed builders have tie-ups with the prominent banks like ICICI, HDFC, and SBI which drastically reduce any risk of fraud or malpractice. These banks trust the reputed builders and that makes your loan sanctioning process a piece of cake! Avoid making the common mistake of investing in a real estate property developed by a less renowned builder as you might get your hard earned looted.
Invest in a property that has established a bond of trust with its prior customers and has earned a good reputation in the market. One such builder is the House of Hiranandani that has been changing the landscape of real estate in India. Our developments stand as proof of superior aesthetics and top-notch quality construction with all the global amenities.

Sources: www.zricks.com

How To Invest in Real Estate in India

How To Invest in Real Estate in India

October 1, 2018 in Investment, Real Estate News

We Indians are big-time Real Estate Investors. We look for almost every opportunity, property and schemes to invest our small finances. With our rich history providing enough proof that even kings and kingdoms fought against each other over land and property, real estate seems to be one of the best investment options ever. However, you need to know about every nick and niche related to real estate investment in India before you dive into it to earn profits.

So, here are tips and simplified steps to help you invest in the Indian Real Estate Market.

1. Patience is the Key: When you indulge yourself into real estate investment, you need to hold on to your patience more than ever. Stay calm, see the property leisurely and take steps slowly. Never rush into investing your finances without a proper research.

2. Research: Plan and research thoroughly before you invest. Always remember, Real Estate values and profits depend a lot on the city, location, environment and the condition of the infrastructure. Better the location and infrastructure, better will be your profits. A good location includes your direct access to some of the most important amenities of our daily life. For instance, commutation, shops, gardens, market, etc. are all small factors that need to be considered while researching for a property investment in India.

3. Background and Paper Check: One of the most important steps you need to consider when planning to invest in the real estate market is to follow a thorough background check of the property, property owners and its papers. Take help of your legal experts to pull off information about the property and assess the documents for any forgery or issues to avoid controversies and scams. Make sure the property is clean without any legal issues.

4. Check and Compare Rates: Once the previous pointers have been considered and checked, it is time to study and compare the rates of the property. Get the help of evaluators to check the value of the property and the infrastructure to ensure you get a good deal. Cross check the value with other sources to get the best rates. You may also take help from the Local Government for guidance to know about the real value of the property.

5. Calculate your Savings: Evaluate your savings before you plan to go ahead with the investment. Calculating your savings will only help you plan for your loans, the bank interests and hence the risk of your investment. Make sure your pocket allows you to make the investment without any risks to your regular life.

6. Consider all related Risks: Every investment has certain risk factors. Same is the case in the real estate investment market. In India, legal issues and internal land disputes are highly common. Also, it is wise to take help of the city council to check with the city expansion strategies to make sure the property and its location do not intervene with the city’s future plans. Consider going through these matters before you make a final decision while investing in the Indian Real Estate.

Sources: zricks.com

Supreme Court Construction ban may take toll on Development

Supreme Court Construction ban may take toll on Development

September 28, 2018 in Investment News

The development could grind to a halt in Maharashtra, Madhya Pradesh, Uttarakhand, Chandigarh and elsewhere following a Supreme Court ban on construction in parts of the country, delaying deliveries and hurting property companies and allied industries besides putting people out of work. The real estate industry said it’s being punished for state inaction over solid waste management. “It will choke supply, and impact home seekers. Effectively, home buyers will suffer just because some state governments have not formally notified the policy,” said Niranjan Hiranandani, national president of lobby group National Real Estate Development Council (Naredco).  “The intention behind the order is good from a long-term perspective, but a blanket ban stopping all construction will have a negative impact on housing.”  The SC has banned construction in several states and union territories because they haven’t put in place rules on solid waste management. 

The biggest impact is seen on Maharashtra, home to the high-value property markets of Mumbai and Pune, although the state has prepared a policy on the matter and may, therefore, be able to get relief on this score, developers said.
“The overall annual real estate industry size in India is close to Rs 10 lakh crore, of which close to Rs 1.5 lakh crore to Rs 2 lakh crore is contributed by Maharashtra,” said Pankaj Kapoor, MD, Liases Foras Real Estate Rating & Research. “Over 1,000 allied industries across major sectors such as banking, cement, steel, sanitary, tiles and electrical equipment will be impacted severely if the states do not manage to get this stay vacated soon.”The decision will also have a bearing on the recovering economy and the job market, he said.
Investors seemed to be optimistic, however, as real estate companies mostly shrugged off the news on Monday. Godrej Properties ended up 1.7% at Rs 698.10, HDIL gained 5.5% to Rs 34.55, and Oberoi Realty ended up 3% at Rs 454.95. Indiabulls Real Estate’s shares ended down 3.1% at Rs 149.25.
“The policy for solid waste management is already in place in Maharashtra, even though the same had not been submitted to the concerned authorities,” said Kotak Institutional Equities in a report. If a stay is given in the coming weeks, the impact of the ban won’t be material, analysts said.
“They (Maharashtra) are going to apply for a stay of this order as they are saying they already have a solid waste management policy in place,” said an analyst at a Mumbai-based brokerage. “If Supreme Court gives a stay, there will be no impact. If they don’t get a stay, then they will have to wait for the October 9 hearing.”
Hiranandani said it would have been better if the court had penalised the states and barred new construction while allowing ongoing projects to be completed.According to the court, the states and union territories had not framed any policy under the 2016 Solid Waste Management Rules put into effect by the environment ministry in April 2016.
Experts are hopeful that the matter will be resolved soon, with the concerned state administrations doing what is necessary and the court allowing construction to resume.
Sources: economictimes.indiatimes.com
Important Rules For NRIs Investing In Indian Real Estate

Important Rules For NRIs Investing In Indian Real Estate

September 26, 2018 in Investment, NRI News

Non-resident Indians (NRIs) have been a significant segment of investors, in the Indian real estate market. NRIs generally buy properties in India for investment purposes or out of their emotional connection with their country and for settling back, once they retire.

According to Amit Wadhwani, director of Sai Estate Consultants, India has emerged as a lucrative spot for international capital. “Overseas investments have surged 137 per cent, from USD 3.2 billion during 2011-13 to USD 7.6 billion during 2014-16. According to a survey, almost 30 per cent of the total global real estate transactions in India, will be cross-border,” he adds.

Important FEMA rules that NRIs must keep in mind: In order to attract more foreign investment, the Reserve Bank of India has made the rules simple for NRI investments. Real Estate transactions fall under the purview of the Foreign Exchange Management Act (FEMA). “An NRI or person of Indian origin (PIO), as defined in FEMA, can acquire by way of purchase, any immovable property in India, other than agricultural land/plantation property/farmhouse. This is under a general permit that has been given by the government of India. However, no person being a citizen of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan, shall acquire or transfer immovable property in India, other than lease, not exceeding five years, without prior permission of the Reserve Bank,” explains Amarjit Bakshi, managing director, Central Park. Types Of Properties Where NRIs Can Invest:  An NRI is allowed to invest in both residential and commercial properties in India. However, any agricultural land, farmhouse and plantation property can be owned, only if it is inherited or gifted to the NRI. Financial Transactions By NRIs: When it comes to property transactions in India, NRIs/ PIO can make payments out of:

  • Funds remitted to India through normal banking channel.
  • Funds held in NRE/ FCNR (B) / NRO account maintained in India.
  • No payment can be made either by traveller’s cheque or by foreign currency notes.
  • No payment can be made outside India.

Loan Eligibility For NRIs:  Bakshi elaborates that “Like normal Indian citizens, NRIs/PIOs too can avail of home loans in Indian rupees for their property purchases, up to 80 per cent of the property value, depending upon individual eligibility. Such a loan can be repaid:

  • By way of inward remittance through normal banking channels.
  • By debit to his NRE / FCNR (B) / NRO account.
  • Out of rental income from such property.
  • By the borrower’s close relatives, as defined in Section 6 of the Companies Act, 1956, through their account in India, by crediting the borrower’s loan account.”

How NRIs Are Taxed, For-Profit Earned From Real Estate Investments NRIs can earn returns from their investments in real estate, in the form of rental income and short or long-term gain. Rental Income The rental income earned from a property asset in India falls under the income accrued in India and is taxable, irrespective of residential status. Short-Term Capital Gains Short-term capital gains apply to the profit earned through the sale of a property, within two years of its purchase. The capital gains for such property are calculated as the difference between the sale proceeds and the cost of acquisition. It is taxed as per the applicable slab rate for the NRI. Long-Term Capital Gains Long-term capital gains (applicable when the property is held for more than two years) are taxed at 20 per cent. However, unlike short-term capital gains, the exemption can be claimed under sections 54, 54 F and 54 EC. If an NRI opts for an under-construction property, they may have to give a power of attorney to a trusted associate, for completing the deal. Hiring a lawyer to prepare the document, is also crucial, to ensure that there is no forgery and the investment is secure. Sources: housing.com

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