NRI: How NRIs are driving the emergence of ‘virtual leasing’

“Hybrid” and “remote” have been the new buzzwords for some time now. While the pandemic has made it difficult to transcend territory, technology has ensured that anything can be managed and done with the click of a button.

Real estate has been considered a safe bet for investment purposes for generations. However, the challenges we face in becoming global citizens with fixed assets have multiplied. Non-resident Indians for example, despite moving to a different country, find it profitable to invest in real estate in India – be it for sentimental reasons, the associated tax benefits, or the exposure that investing in Indian rupees brings compared to a different currency.

Investing in real estate is considered a good idea by NRIs since they can plan to settle in their home country after retirement. In fact, the pandemic-induced weaker rupee for 2020 and record-low interest rates have made home buying in India a lucrative option for NRIs.

While both residential and commercial real estate are great investment opportunities, they require adequate research, time, effort and maintenance. Whether it is about 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 drawbacks like lack of transparency, property maintenance, complexity in taxes, legal complexities, rent maintenance etc. Proptech companies have stepped in splendidly to tackle these problems.

Challenges in remote property management and ownership

Real estate ownership can be a great way to get a steady income and increase wealth for anyone, but it can also become an issue with the long-term responsibility to maintain it. Even more so for the NRIs, who not only live close to their properties in India but are also known for maintaining a full range of asset classes in their portfolios.

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Often, it is their trusted relatives and friends in India who serve with the power of attorney to help implement and advise on the main steps – from buying, selling, preparing lease agreements, maintenance, drawing, searching for tenants, navigating tax system changes, etc. And sometimes it is difficult to ask friends/relatives to help you because 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 external sites and end up with fraudulent pitfalls or costly add-ons to an already costly investment. Without regular property inspections, property damage can go unnoticed and eventually become an expensive issue. Also, at the end of the day, nothing kills tenant retention faster than infrequent maintenance.

The rise of “virtual leasing”

In India at present, there are no restrictions on the number of immovable properties that both NRIs and OCIs are allowed to hold, along with many other benefits including zero tax implications at the time of acquisition. This is also the reason why newer proptech companies like NoBroker themselves have seen a huge increase in inquiries about investments from NRIs.

Also, proptech platforms allow owners to virtually join tenants using property photos and how-to videos despite lockdown restrictions, and these outlying trends have also encouraged the launch of new services such as ‘comprehensive property management’.

Bullish real estate investment confidence: a bullish economy

The success has been tremendous with such a sought-after service for NRIs – particularly in boosting the flow of investments into the Indian real estate industry. Recent reports indicate that nearly $13 billion has been allocated to the Indian real estate market, and it is likely to grow by 12%, reaching nearly $15 billion in FY22. These are encouraging numbers! With strong service in the market not only to preserve the Indian possessions of NRIs all over the world, but also to protect them from becoming a burden (financial and mental) and to become an easy source of regular income and a means of generating wealth.

Even better, by helping NRI investors gain confidence in their remote properties, I remain confident that India’s real estate sector will reach the trillion dollar market size mark by 2030.

ET online

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