Embarking on the exciting journey of investing in Hyderabad real estate as an NRI? Congratulations on choosing a city renowned for its rich cultural heritage and thriving as a technological hub, making it an enticing prospect for real estate investment.
Before you delve into the vibrant property market of this thriving city, it’s crucial to equip yourself with the knowledge that will set the stage for a successful investment. In this blog post, we uncover the 9 key insights every NRI Should Know Before Investing in Hyderabad Real Estate.
From navigating the legal intricacies to exploring the heartbeat of emerging neighborhoods like Sadasivapet, Gachibowli, Madhapur, Jubilee Hills, Banjara Hills, HITEC City, Kondapur, Miyapur, Manikonda, and many other locations. Join us as we sculpt a canvas of informed choices in the captivating realm of Hyderabad’s real estate. Let’s ensure your investment journey is not just fruitful but also filled with the cultural and technological wonders that make Hyderabad truly unique.
Here are 9 Reasons why NRI Should know before investing in Hyderabad
1. Market Overview
Hyderabad’s real estate market has witnessed impressive growth in recent years. As of Q3 2023, property prices have surged by 15% year-on-year, fueled by robust demand across residential and commercial segments.
The average capital value of residential properties stands at a promising ₹7,500 per square foot, with premium locations like Banjara Hills and Jubilee Hills exceeding ₹15,000 per square foot. The city also boasts a vibrant rental market, with average rental yields hovering around 4-5%, making it a magnet for investors seeking steady rental income.
2. Legal Regulations
The first and major one is Legal Regulations. Understanding the legal regulatory framework for property ownership and eligibility is the first pass for NRIs in Telangana, including compliance with the Foreign Exchange Management Act (FEMA) regulations and RBI rules. These rules are mandatory for a secured purchase by NRI or PIO in Telangana.
3. Investment Goals and Location Considerations
Defining the investment goals and Location Considerations is also a prime factor in choosing real estate investment in the metro, whether residential or commercial – based on your objectives and preferences. Many hubs like Sadasivapet, Gachibowli, Madhapur, Jubilee Hills, Banjara Hills, HITEC City, Kondapur, Miyapur, Manikonda, and Kompally are booming in real estate in both residential and commercial sectors. With the new Chief Minister, the fast-faced Hyderabad real estate is now gearing forward, as he was a real estate figure in the past before coming to politics. Other than the mentioned areas, the new govt will plan to develop real estate in more and more areas in Hyderabad suburbs. So, it’s time for NRIs and PIOs to go with a positive mind in Hyderabad real estate.
Reason 4: Hyderabad's Real Estate Market – A Magnet for Foreign Investments
Hyderabad’s favorable business environment, government policies, and the presence of tech giants continue to attract international projects. Investing before elections not only positions you for potential gains but also reinforces confidence in foreign enterprises, further enhancing the market’s appeal.
4. Reputation of the Builder
Another consideration for an NRI before investing is, the Reputation of the builder. It’s a prime factor for an NRI investor to research the builder’s portfolio. We, Imark Developers, are one of the leading and trusted real estate firms in Hyderabad. We emerged from the renowned Devaj Infra, a prominent values-driven company, starting in the year 2008 with four plus national award baggers. Investigating reputed builders and developers in Hyderabad with established names and a track record of delivering quality projects is essential for any NRI for their secured saving investment.
5. Market Trends
Analyzing the graph of real estate in the metro where you want to invest is very important. As a new phase of development will begin with the new govt in the state, we, Imark Developers, grasped the drift and are there for you with IMARK WESTCITY PRIME and IMARK WESTCITY CAPITOL on NH65 in Sadasivapet, which is a commutable distance from the govt’s new project National Investment and Manufacturing Zone, which is offering 5 lakh jobs in the coming days. Analyzing market trends in different areas of the city with demand-supply dynamics and identifying emerging investment opportunities in the future will give you the best value for your money.
6. Understanding Tax Implications
Understanding the tax implications associated with property investment, including taxes on rental income and capital gains, is crucial. If you sell a property in India, you may be liable to pay
- Capital gains tax – The tax applies to the profit you make from the sale. The capital gains can be categorized as short-term or long-term, depending on the duration of property ownership, and another one is
- TDS, Tax Deducted At Source – When you sell a property in India, the buyer must deduct TDS at the applicable rates (currently 1% for properties valued above Rs. 50 lakhs). As an NRI, you can claim a refund if your actual tax liability is lower than the TDS deducted. Apart from this, NRIs are also entitled to certain tax benefits on home loans taken to purchase residential properties in India. These benefits include deductions on principal and interest payments under section 24(b) and section 80C of the Income Tax Act, respectively. It is advisable to consult with a tax advisor or chartered accountant specializing in NRI taxation to understand the specific tax implications based on your circumstances.
Investing in real estate can be lucrative for Non-Resident Indians (NRIs) looking to diversify their investment portfolio. However, financing these investments can sometimes be challenging. There are several loan options for NRI to invest. One among them is
- Home Loan: NRIs can avail of home loans to purchase residential properties in India. Many banks and financial institutions offer specialized home loan products for NRIs, with competitive interest rates and flexible repayment options. These loans can be used to buy ready-to-move-in properties, under-construction projects, or even for self-construction. Another one is
- Loan Against Property: NRIs who already own properties in India can leverage their existing assets to obtain a loan against the property. This loan can be used for various purposes, including financing additional property purchases, business expansions, or personal expenses. The loan amount is determined based on the value of the property and the borrower’s eligibility. For the above-mentioned two loan options, NRIs need to submit specific documents while applying for a loan. These typically include a valid passport, employment contract, work permit, income proof, bank statements, property-related documents, and Power of Attorney (POA) in favor of a trusted representative in India.
8. Power of Attorney (POA)
An important step to know in real estate investment is Power of Attorney (POA). It is a legal authorization provided to another individual to clearly define actions or decisions on behalf of the executor. The one who writes the Deed is called the Grantor. The one who acts on the Grantor’s behalf is the Agent or Attorney. According to the Registration Act of 1908, when an NRI buys or sells residential property in India, the physical presence of both parties is required to register the transaction. So, if the NRI cannot be present, he/she must appoint someone trusted as the POA to sign the documents. The Power of Attorney needs to be registered with the respective sub-registrar. The Power of Attorney can be executed in India or overseas where the NRI/OCI customer is residing. Understand the process and implications of granting Power of Attorney for property transactions. Choose a reliable person if appointing someone for POA.
9. Be aware of rules regarding the repatriation of funds
NRIs can repatriate sale proceeds, subject to certain conditions and limits. As long as the property has been purchased following FEMA guidelines, the NRI can repatriate the proceeds from the sale of property in India. However, the amount to be repatriated cannot exceed the principal amount.
10. Property Management Logistics
Hiring a professional property management service: It is imperative for NRIs who may not be physically present to manage their properties in India. This service plays a crucial role in handling tasks such as rent collection, property maintenance, and tenant management on behalf of the owner.
Legal Compliance: NRI investors need to understand local real estate laws and regulations thoroughly. They must ensure that their property transactions comply with legal requirements, and they should have a clear understanding of property rights and ownership.
Being well-informed about these aspects will empower NRIs to make informed decisions and navigate the shades of the real estate market in Hyderabad effectively.
Choose iMark Developers for a symphony of success! We blend cultural charm with technological brilliance, offering prime locations and a legacy of trust. From legal intricacies to financing, we orchestrate your investment masterpiece.