The Top 3 Challenges NRI’s Face When Dealing With Real Estate In India
Globalization is a funny thing: Back in the day, leaving your country meant you either had a lot of money or were about to be in real, serious struggle.
However, at least for most people, this is not like that anymore in 2017. People travel for leisure, entertainment, and fun; or immigrate to work abroad with anyone hardly batting an eye about it. This is particularly the case for the Indian people, with 30.8 million of NRI’s living all around the world (https://reobee.com/blog/indias-real-estate-market-is-booming).
We might not realise how fast the times have changed and how far we’ve come, but truth is, even 2 generations ago, investing in real estate back in India as an NRI meant you had to be always traveling, having people you trust working to find opportunities for you, and that you could very quickly lose a lot of money. This year, nonetheless, NRI’s are not moving millions, but billions of dollars in real estate in India. And, if you’re living in a developed country and thinking about investing, there’s a high chance you may want to join them, as many others are doing now. (We’ve written about it here, (https://reobee.com/blog/real-estate-why-nris-have-been-investing-back-home-for-over-10-years) and here
Because of all of that, and because we know investing in a new market can be scary, here’s a couple of things you need to know as an NRI to start investing in the Indian property market, and some advice you can follow to surpass these challenges.
The obvious one: Distance
As much as the Internet is making it easier for everyone to be in touch with anyone regardless of location, certain things are probably never going to change. Two of these are time zones and distances, and, when you’re in business with someone, you may prefer to do it with someone you can talk to at reasonable hours, have a fluent conversation with, or maybe even see in person.
Our solution: Fortunately, you can still invest back in India without dealing with extreme distances by trading with other NRI’s. Just in North America (the second largest contributor to the real estate market in India), there’s 5 million NRI’s, so we can safely assume you’ll find someone close to you.
The ugly one: Fraud
Deception can be a terrible thing to prevent, and it’s caused many NRI’s headaches, with some of them learning the hard way not to trust the wrong people. From sketchy development companies to non-registered brokers and locals that abuse the NRI’s lack of knowledge when it comes to legislation, you should always be on the look for red flags coming out in any step of your negotiations before you decide to make a deal.
Because of its nature, fraud can also be difficult to spot at first, so we’ve compiled a small checklist that can help you avoid some of the most common fraudulent schemes set up to take advantage of NRI’s showing up with lots of money and little knowledge.
Our solution checklist:
- Know the law: Never, ever invest without knowing your full rights as an NRI or the law. This can lead to easy mistakes, such as trying to purchase farmland or agricultural land, which is prohibited.
- Deal only with registered brokers: You can never be too careful when dealing with agents. Know the Real Estate Regulatory Authority is there to help you, and that every agent should be verified by the state to perform their jobs.
- Check your developer’s history: Developers are now required by law to have an easy to access track record on the state RERA website. Distrust anyone that’s not properly registered, and don’t be afraid to ask questions.
The Entry gate: The Market
You ’re in real estate to make money, not to lose money.
However, knowing the standard market rates, the way property appreciates or depreciates, the market lingo, the laws, your role as an NRI, who’s in it, why are you doing it, and a big long etcetera it’s a challenge that should not be underestimated.
Many NRI’s are hugely successful at their jobs or companies and feel like they got everything handled to enter a new market, but be aware at all times that real estate it’s its trade. This all can be the difference between making a great deal or throwing money away, so take your time and make sure you know everything you need to know for every step of the way.
Our solution: Not much to do here but study and get the right assessment. We recommend you start learning about real estate in general and in India beforehand and always make sure to double-check any new or odd facts. As a rule of thumb, always ask yourself “what can this site gain from telling me this?”, as individual sites could not be 100% sincere to sell something to you.
This is all for today, we hope you’ve learned something today and that you’ve expanded your vision for this market.
If you feel ready to invest in real estate in India as an NRI, make sure to pay us a visit in Reobee.com, where we provide a 100% free platform for you to deal directly with other people like you, buying or selling property overseas.
We’ll keep you posted for new market insights!