Evaluate the worth of property before you buy

Investing in real estate in India has for decades been one of the most important goals for NRIs living in the UAE and other Gulf countries. Buying a home in India used to be a tough proposition and most from the salaried class could hardly dream of being able to rustle up the amounts needed to buy an apartment, especially at a time when housing finance was unheard of in the country.
Working in the Gulf saw most NRIs earning much more than what they got in India, and the prudent also started saving substantial amounts and channelising it into the formal banking sector through savings. And as these savings added up, many invested the amount in homes - either flats in cities, or even small independent units or land.
Of course, over the years some NRIs have faced problems by investing in projects that failed to take off, or where the promoters simply disappeared after collecting funds both in India and abroad. Consequently, one of the most important measures that an NRI has to take before investing in a home in India is to do thorough research of the project.
Fortunately, these days many reputed institutions, including housing finance companies, banks and financial institutions do a thorough job of most of the large new projects that come up in major cities. They go through all the documents related to land ownership, project clearances, approvals from the civic bodies and other regulators before they extend home loans for buyers in the project.
Despite these measures being taken by intermediaries, NRIs investing in properties in India also have to do thorough research to ensure that their investments are safe. One of the most important things that an NRI has to do before investing in a property back home is to do a thorough legal check-up. According to Anuj Puri, Chairman, Anarock Property Consultants, NRI buyers should hire a reputed lawyer to vet property documents.
Original title deed documents have to be verified and it should also be ensured that the property title is in the name of the seller. They also need to do a thorough check to ensure that the seller has cleared all the dues related to the property, verify that the seller has not diluted the right to transfer the property to a buyer and ensure that the property is not built on agricultural land without requisite government permissions. An NRI may get into legal problems in the case of such transactions. And in case of under-construction property, an NRI has to give a power of attorney to the developer or a trusted associate, adds Puri.
Of course, NRIs are among the savviest property investors in India, and they are able to gauge the new investment trends in the real estate market. He points out that for long the returns on investments that NRIs could get on residential assets were extremely rewarding, considering the significant capital appreciation.
But the market slowdown of the last few years saw capital appreciation being much lower than the NRI investors' expectations. Naturally, this means this is the right time to invest in a property back home in India.
There are basically three major stages that an NRI buying a property in India has to go through - the pre-purchase stage, the purchase stage and the post-purchase one.
At the first stage the NRI has to decide the city where the investment is being made.
Many prefer cosmopolitan cities like Delhi-NCR, Bengaluru or Pune, though they might originally be from other parts of India. For an NRI living in the Gulf, who is originally from Chennai or Kolkata, buying property in Bengaluru may appear to be a sensible decision if he or she plans to relocate within a short period.
However, many NRIs think of actually moving into the apartment after about 8 to 10 years or even more. An apartment bought in a city one is not familiar with could cause problems. It is better for NRIs to invest in a property close to their home towns.
For instance, a person from the north might find it better to buy a property in Delhi-NCR, Jaipur, Lucknow or some other major city closer home than in Bengaluru or Pune.
The second phase of buying a property can also be quite challenging, as most NRIs are on short duration trips of a week or a fortnight to India. So it is advisable for them to ask a close relative or friend to keep monitoring the project in a specific city and to brief them on the latest developments before taking the final plunge.
Thanks to technology, NRIs can closely monitor a project in India from abroad, but it is best to see that someone keeps visiting the site and provides details of the construction work and the various stages that it goes through.
Again, taking a home loan ensures that the housing finance company has already done a check on the legal and other important aspects of the project. NRIs have also been told by some consultants that it is better to invest in a project that will result in deliveries within a few weeks or months, instead of wait for one to be completed in about two to three years.
There is a lot of work that needs to be done even after taking possession of a flat in India. Managing the asset, clearing dues and ensuring that the investment has been worthwhile means that the NRI buyer has to keep constant checks and monitor the investment.
NRIs in the Gulf have to invest a significant amount of time in managing their property back home. If the investment is for a specific period after which the NRI wants to sell the property, then it is important to ensure that it is maintained well.
However, if the NRI wants to ultimately move into the flat after a few years, even then a lot needs to be done to ensure a smooth shift to the new place.

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