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Common Mistakes Made By Indian NRIs while Investing in Real Estate in India

When it comes to investing in real estate, we tend to make a lot of mistakes, either due to lack of time or awareness.<br><br>Here you know about what, how and why we make these common mistakes, how you can avoid repeating them again in your future investments and our recommendations on what you can do alternatively for better Investment, in such scenario.

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Common Mistakes Made By Indian NRIs while Investing in Real Estate in India

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  1. 12 COMMON MISTAKES Made by Indians / NRIs around the World While Investing in Indian Real Estate

  2. COMMON MISTAKE NO . 1 Buying a site or Flat with whatever money you have in your pocket and that too tending to invest only in your home town WHAT IS WRONG This is one of the biggest and most common mistake made by NRIs. They do not leverage their loan eligibility to buy an asset with 20% from their pocket and 80% from home loan and even if they do, they buy to keep the flat or rent out at a meager 2% returns . What Can Be Done Better By investing only to resell before registration and roll over to make 50% to 100% capital gains once in 3 to 4 years.

  3. COMMON MISTAKE NO . 2 I already have a site or Flat in my hometown and hence not interested in investing further. WHAT IS WRONG Biggest mistake you may make Purchasing a Flat or site in your hometown and then constructing a big house or villas, only to struggle later in finding a tenant for good rental income (where one cannot earn more than 2% to 3% ROI) What Can Be Done Better By invest in New Property at Prime Locations where the Property value multiplies many fold + You get Good Rental Money.

  4. COMMON MISTAKE NO . 3 I already own a Flat or villa that is earning rental income. This is the universal mistake done by biggest of achievers They can not spend time to go deep into matter as they are busy in their professional life. What one may not realize in this case is that your ROI will only be a miniscule 2% to 3% p.a. through such rental income. whereas You can earn 30% to 50% p.a. by simply reselling all such assets as above and investing that money in much more lucrative assets in major cities .

  5. COMMON MISTAKE NO . 4 I did not have a good experience with my 1st investment in India so I am no longer interested as Indian investment is risky and not worth it. This is a very genuine reason Most NRIs had such experience. If you have access to professional agencies in India, you can reverse all those earlier losses. whereas If you invest only with the top signature projects, your money will always be safe and minimum returns are virtually guaranteed. Most important is to use the ADVICE and services of a credible consultant in India.

  6. COMMON MISTAKE NO . 5 I am not sure when I will relocate and hence will decide after 5 years. NRIs have in fact closed their minds totally to the idea of investing in India even though good opportunities exists. whereas The right way of doing it is to start investing right now – buy assets only to sell them when they have appreciated in 2 to 3 years – and this way slowly build up your finances that would empower you to purchase your dream property when you decide to head back to India.

  7. COMMON MISTAKE NO . 6 I might relocate in 2 years and hence want a place for stay on return. Many NRIs acquire an asset in India one or two years ahead of their relocation back to the country, only to discover that what they bought is no longer suitable to their current standard of living. whereas What Can Be Done BetterPurchase a home only one or two years after relocating to India and in the meantime, double your money by investing it in smart assets with the sole purposes of selling them off in 2 to 3 years time and with your doubled corpus, you can buy a much bigger and better asset for your family.

  8. COMMON MISTAKE NO . 7 I already have my parent’s house and hence not interested in investing in any other property in India. WHAT IS WRONG The property will most likely NOT BE situated in best part of the city or have the best infrastructure or amenities that are required to provide a comfortable and upscale living experience for an NRI family. What Can Be Done Better • If such a property can be sold off : • The sale proceeds from that property can be invested in assets that can double their investment every 2.5 to 3 years. • Resulting in the build-up of a massive corpus for the NRI in a few years time. • With this the NRI can then purchase the very best of the properties in the market that have the best of amenities and social fabric in his city of choice, AS AND WHEN he decides to relocate to India.

  9. COMMON MISTAKE NO . 8 I already have my parent’s house and hence not interested in investing in any other property in India. WHAT IS WRONG The property will most likely NOT BE situated in best part of the city or have the best infrastructure or amenities that are required to provide a comfortable and upscale living experience for an NRI family. What Can Be Done Better • If such a property can be sold off : • The sale proceeds from that property can be invested in assets that can double their investment every 2.5 to 3 years. • Resulting in the build-up of a massive corpus for the NRI in a few years time. • With this the NRI can then purchase the very best of the properties in the market that have the best of amenities and social fabric in his city of choice, AS AND WHEN he decides to relocate to India.

  10. COMMON MISTAKE NO . 9 I am not aware that I can take a bank loan in India while living in US. WHAT IS WRONG As most of us are not aware of the benefits or availability of home loan in India, we restrict our investments based on funds that we have. This restricts the profits that you can earn by going in for a larger property. What Can Be Done Better • NRIs can take home loans in India and it’s a simple process today • This can be completed entirely through emails and a couple of couriers to India. • You can complete the entire process in 3 to 4 weeks • Without having to travel to India or burden your relatives or friends in India.

  11. COMMON MISTAKE NO . 10 I do not want to bother my old parents or take obligation from my relatives & hence will not invest although I may be missing out on good opportunities. WHAT IS WRONG As most of us are not aware of the benefits or availability of home loan in India, we restrict our investments based on funds that we have. This restricts the profits that you can earn by going in for a larger property. What Can Be Done Better • Consult a professional Real Estate consultancy firm • All you need to do is to appoint a relative or friend as GPA (who is only authorised to sign and accept agreements on your behalf but has no right to sell your property)  • A top consultancy firm is one-stop shop for all Real Estate needs in India.

  12. COMMON MISTAKE NO . 11 My money is invested in FDs and I don’t want to break them because I may have to pay a penalty or lose interest benefit. WHAT IS WRONG FDs give you a paltry 7% to 8%, block your funds for 10 to 15 years and have NO TAX benefits at all – making them highly inefficient in the long run. What Can Be Done Better • Today You have a number of more lucrative and equally safe opportunities in • Real Estate Investments in India where you can earn atleast 15% to 20% per annum.

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