How NRIs are driving the rise of ‘Virtual Landlording’
Investing in properties is considered to be a good idea by NRIs given they can plan to settle down in their country of origin after retirement. In fact, the 2020 pandemic-induced weaker rupee and record-low interest rates made home-buying in India a lucrative option for NRIs..
“Hybrid” and “remote” have been the new buzzwords for quite some time now. While the pandemic has made territories difficult to transcend, technology has ensured that anything can be managed and done at the click of a button.
Real estate has been considered a safe bet for investment purposes for generations. That said, the challenges in us becoming global citizens with immobile assets have increased multifold. Non-Resident Indians for instance, despite moving to a different country, find it lucrative to invest in real estate in India – be it for emotional reasons, the associated tax benefits, or the exposure that investing in Indian rupees brings compared to a different currency.
Investing in properties is considered to be a good idea by NRIs given they can plan to settle down in their country of origin after retirement. In fact, the 2020 pandemic-induced weaker rupee and record-low interest rates made home-buying in India a lucrative option for NRIs.
While residential and commercial properties alike are great investment opportunities, they require adequate research, time, effort, and maintenance. Be it finding the right property, preparing it, finding the right tenants, or finding the right person/expert to take care of the property. But NRIs suffer from impediments such as lack of transparency, maintenance of the property, complexity in taxations, legal complications, tenancy maintenance, etc. Proptech companies stepped in wonderfully to address these problems.
Challenges in remote-property management & ownership
Property ownership can be a great way to get consistent income and to increase wealth for anyone, but can also become a headache with the long-term responsibility of maintaining it. More so for NRIs, who not only do not live near their properties in India, but are also known for maintaining a full spectrum of asset classes in their portfolio.
Ever so often, it is their relatives and reliable friends in India who serve with the power of attorney to help execute and advise around major steps – from buying, selling, preparing rent agreements, maintenance, to painting, searching for tenants, navigating tax regime changes, and so on. And sometimes it becomes difficult to ask friends/relatives to help you as they are busy with their own life.
Moreover, many people do not have friends/relatives who can help and end up trying to manage these things unsuccessfully from the overseas locations and end up with fraudulent pitfalls or costly additions to an already expensive investment. Without regular property check-ups, damages to properties can go unnoticed, and eventually become a pricey affair. Also, at the end of the day, nothing kills tenant retention faster than infrequent maintenance.
The rise of ‘Virtual Landlording’
In India at present, there are no restrictions on the number of immovable properties that both NRIs and OCIs are permitted to hold, along with several other advantages including zero tax implications at the time of acquisition. This is also why new-age proptech companies such as NoBroker itself, have seen a significant increase in enquiries for investments from NRIs.
Also, proptech platforms allow owners to onboard tenants virtually with property images and video walkthroughs despite lockdown limitations, such remote trends have also prompted the launch of new services such as ‘comprehensive property management’.
A bullish real estate investment confidence: A bullish economy
The success has been phenomenal with such a needed service for NRIs – especially in strengthening the influx of investments into the Indian real estate industry. Recent reports suggest ~$13 billion being devoted to the Indian real estate market, likely to grow at 12%, and to reach ~$15 billion in FY22. These are encouraging numbers! With a robust service in the market to not only maintain the Indian properties of NRIs across the world, but also protect them from becoming a liability (financially and mentally) and becoming an easy source of regular income and means of generating wealth.
Even better, by helping NRI investors gain the trust and confidence in their remote properties, I remain ever confident that India’s real estate sector will reach its $1 trillion market size mark by 2030.
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