NRI investors alert! Save money by following these guidelines to ensure safety from fly by night operators
NRI investors often lose their money into the hands of fly by night operators in the Indian real estate because they seal the deal in a hurry.
The Indian real estate market has always attracted considerable interest from the Non-Resident Indians (NRIs). According to the real estate experts, after few years of testing times, the Indian real estate market on Rs 25,000 crore special package is expected to turn profitable in the medium to long term, making it an attractive investment proposition for the expatriated Indian diaspora. Non-Resident Indians (NRIs) represent a sizeable share of buyers on the Indian real estate market. However, when it comes to NRI investment, cases of cheating into the hands of fly by night operator that includes both real estate developers and real estate brokers is a common phenomenon. So, for NRIs coming to invest in the India real estate market, they need to follow proper guidelines to ensure the safety of their hard-earned money;
Speaking on why NRIs become a victim of fly by night operators Shajai Jacob, CEO - GCC, ANAROCK Property Consultants said, "Investment in real estate without adequate knowledge of what works and doesn't work on this exciting but complex market can be problematic. NRI investors especially need to know how to safeguard themselves from unethical practices - by both real estate developers and property brokers." Jacob said that NRI buyers are no longer at the mercy of second-hand information on things like construction progress. States where RERA has been implemented also have dedicated RERA websites that provide a database of registered projects as well as live project updates. Details like launch date, expected possession date, developer details, building details, booking status, etc. can all be found on a project's RERA page.
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Asked about guideline that ensures the safety of the NRI investors Jacob suggested to classify safety majors into two parts — developers and brokers. On real estate developers side, he listed out the following safety majors:
1] Developer’s reputation is of paramount importance. NRI investors should avoid housing projects by unknown developers, especially when it comes to under-construction projects.
2] Even with RERA certification, all housing projects are NOT created equal. Projects by reputed developers are the best bet for safe real estate investment. NRIs should verify this information before making any investment decisions.
3] The legal status of a housing project is the function of whether or not the developer legally owns the land it is being built on, and whether or not he has all the development permissions. Buyers — especially NRI buyers — need to verify the legal status of a project and have every right to ask for all relevant documentation.
On Brokers side RERA also makes it mandatory for real estate brokers to be registered under the authority. However, most brokers in India have avoided doing so as it would make them accountable to an 'uncomfortable' extent. The ANAROCK expert suggested the following measures to avoid any untoward incident from the broker's side:
1] Unethical practices: Many real estate brokers in India as well as Indian real estate investment hotbeds like the UAE make false information about the properties they're selling, such as expected rental yields, capital appreciation, guaranteed returns on investment, etc. NRIs need to be aware of such false promises and only deal with duly RERA-registered brokers and consultancies housed under leading brands.
2] Legal and tax-related advice: Fly-by-night brokers are essentially focused on closing sales at any cost. If an NRI is dealing with a non-RERA registered broker, it is imperative to take additional advice from a legal expert as well as a qualified chartered accountant before investing.
3] Freebies and other benefits: Unethical brokers often offer seemingly too-good-to-be-true freebies and financial benefits to NRIs. Such offers and freebies are often a 'smokescreen' to cover inherent deficiencies in the project, such as bad location, uncertain legal status, doubtful completion timeline, etc.
So, NRIs are advised to follow the above-mentioned guidelines to ensure the safety of their money while investing in the Indian real estate.