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Indian Real Estate Sector, Opening the Doors for the NRI Investor

Mudassir Zaidi
National director- Residential agency-Knight Frank
Sunday, September 21, 2014
Mudassir Zaidi
Knight Frank is a global real estate consultancy with an integrated prime commercial and residential offering, operating in key hubs across the globe. Headquartered in London, Knight Frank India has grown into one of the country's leading real estate firms.

The Indian real estate industry is not the same as it was a decade back. It has seen an enormous growth in the recent past and there is no stopping it. With more and more corporate organizations entering the Indian real estate space, huge funds are being infused into the sector, which is also the need of the hour. Also as with entry of the corporate organization the sector has become far more transparent than ever. As a result, even NRI buyers have begun to show interest in the market, who were earlier hesitant in investing, due to lack of market knowledge about what to buy.
Another encouraging factor about the Indian real estate sector is its stability. Despite the 2008 crisis when several global economies were facing meltdowns, the Indian real estate sector faced considerably very less heat. Indian investors did comparatively better in terms of generating returns amidst a tough market. Hence investing in a country/ market which gives you the desired returns over a sustained period is always a safer option. Also the employment generation of top cities of India like Mumbai, Bangalore, Hyderabad, Chennai, Pune, NCR and Kolkata has become a major factor. Since, with the rise in the employment, availability of adequate infrastructure and the sheer size of the individual asset classes like office and residential make it profitable for NRIs to invest.
However there are still some issues faced by the Indian community residing in US. For instance, when an NRI who is residing in USA also owns a property in India. Even if one does not give the property in India on rent, they would have to pay income tax on deemed rent in India. The deemed rent is determined by certain valuation rules prescribed in the Income Tax Act. Also, there are several other problems that a first time buyer faces as they are hardly aware of the Indian real estate market. There are several consulting companies that help people in such scenarios. At Knight Frank, we follow a series of processes that help NRI customers. Firstly, it is important to take in all the requirements and need of a customer and profile the right kind of products that could be bought. Based on the profile they are provides with a broader understanding of the market conditions and popular properties to help them choose from. It must also be ensured that the right price is quoted for the chosen product. And when a customer is satisfied with a certain property the transaction is facilitated within the agreed time frame. Property consultants also help buyer with the necessary paperwork which is mandatory for any transaction.
Nevertheless, even after having a good consultant, a buyer especially an NRI should take certain precautions. They must be absolutely sure about what they are looking to buy and if the property is really worth. It is also essential to check the track record of the developer and their background. Also it is equally important to know the track record of the broker facilitating the deal. Investing into a property is not a small deal so it is necessary to take care of every minute detail.

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