Weak rupee makes real estate investments cheaper for NRIs

he depreciating rupee has positively influenced the demand from NRIs for residential properties in various cities across India, especially in Mumbai. The rupee has been touching new lows everyday. Even today, the rupee touched 54.82 per dollar in early trades. Exporters and the NRIs are two categories which stands to gain from the weak currency, as they will receive more rupee funds on conversion. The term NRI also includes Persons of Indian Origin (PIOs) and Overseas Citizens of India (OCIs).

“Because of the rupee’s downward trend, real estate has become cheaper for NRIs and many of them are now actively seeking residential property investment opportunities in the financial capital,” says Om Ahuja, CEO – Residential Services, Jones Lang LaSalle India “Apart from the advantages they have due to the depreciating rupee, developers are more than willing to offer discounts today owing to their ongoing liquidity concerns,” says Om Ahuja.



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Should you invest?

Investing in real estate makes sense only if you plan to return to India eventually. And when it comes to finalising the investment, focus on the current price and the potential value of the property in a particular city or a suburb. Here is a quick check list.

1) Reputed builder

“You have opt for a familiar and reputed builder as there is greater chance that projects of reputed builders will appreciate more than the others,” says Jayant Pai, CFP, Vice-President Parag Parikh Financial Advisory Services.

2) Location

The scope for capital appreciation will be much higher in suburbs where you expect infrastructure development. That way you can enter at a lower price level and make optimum gains. “Ideally the locations should witness some big infrastructure development such as launch of new commercial spaces, airport, IT parks etc. These developments have the potential to earn a good return on your real estate investment,” says Om Ahuja.

This can be underscored from that fact that in Chennai, properties along OMR road are fetching good values because of its proximity to several IT companies. “If you buy a house in such locations, there is scope to see good capital appreciation and also you stand a good chance to get a personal or corporate lease on such properties,” says Om Ahuja.

3) Invest in individual houses or apartments

“NRIs are not permitted to purchase plots of land/plantations/farm houses and even commercial real estate is subject to a plethora of limiting regulations, purchasing apartments or bungalows may be the only options available,” says Jayant Pai.

4) Document Check

The most important document required is the sale/purchase deed. Sale deed will confirm the land is on the seller’s name who has the only right to sell the land. You need a copy of previous deeds if you have also bought it as a resale property. You also need original copies of Stamp duty and registered house documents. In case of a joint ownership, the owner/owners have to submit documented consent from the joint owners.

5) Avoid short-term investment

Ideally an investor should look at a time horizon of 5-7 years to compute actual gains, experts say. “However, real estate investments in the near term can get tricky since it is an interest rate sensitive sector. The demand may be impacted by relatively high interest rates,” says Vishal Kapoor Head, Wealth Management,Standard Chartered Bank, India.




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