One of the main reasons for  NRIs investing in India has been an emotional one.  NRIs Investing in Indian Real Estate in their hometown does so for reasons which range from wanting to be near family and childhood friends, to boosting self-esteem on home turf and plain old nostalgia.

There are many drawbacks to avoid while Investing in Indian Real Estate:

The primary point of reference has to be the Reserve Bank of India’s (RBI) guidelines for NRIs investing in Indian Real Estate

1. One thing to keep in mind is that overseas Indians cannot purchase agricultural land, plantations, and farmland.
2. Get a reputed legal expert to check the land record documents before investing. In most of the cases, residential complexes have been developed on agricultural land without the requisite permissions from the Government. In such a situation, the development will be declared illegal, and the property investors are liable to lose.
3. Check the original title deed of the property or land. Make sure that the title of the property is in the name of the seller. In many cases, the seller presents only a photocopy of the title deed. One reason for this is that the property has been mortgaged and the other could be that there are multiple owners. The primary check is very essential so that the sale is not challenged in court later on.
4. Ensure that the real estate developer has got all the necessary Government clearances – municipal, environmental and the authority to transfer the undivided share to an individual flat owner and the complete land to the society when the project is finished.
5. Once the due diligence is done and the amount has been negotiated at a mutually profitable level, the sale agreement has to be performed on an Rs. 50 stamp papers are mentioning the final amount, the advance, time to pay installments and details of the installments.
6. Once the sale deed is done, it has to be registered with the sub-registrar or the Sub-District Magistrate. The NRIs foreign address has to be mentioned in the sale agreement. In case, a power of attorney (PoA) holder is nominated, the power of attorney has to be notarized by the Indian Embassy in the buyer’s country of residence.
7. The payment should be from funds through banks or from funds which are held in an NRI bank account; payment can be made through either non-resident ordinary (NRO) account, non-resident external (NRE) account or foreign currency non-resident (FCNR) account.
8. Apart from stamp duty and registration costs, there is also a stamp duty levied.
9. NRIs can get home loans if the terms and condition laid out in the Foreign Exchange Management (Deposit) Regulation 2000 is followed. Banks cannot advance new loans or renew old ones for more than Rs 1 crore against NRE and FCNR deposits.
10. The loan can be serviced and repaid with the remittances which have been obtained through banks and through direct debit from the NRE/NRO/FCNR bank account. It can also be serviced by rental income from the property