Investing abroad in Realty

Real Estate being a popular instrument of investment for Indians, it’s little wonder that Indians are investing in realty outside the country. For one, it gives better returns when the sale is made during a low rupee, for another, it can make way for citizenship in that country.

The RBI has also been relaxing restrictions for Indians investing in realty abroad. One can invest a maximum of USD 200,000 in a year on any instrument abroad, out of which, as much as USD 125,000 can be invested in realty.

That Indians are making the most of this, is no surprise. In 2013-2014, Indians invested a whopping USD 5.8 billion on realty in the US, with the most popular destinations beinginvesting New York, Chicago, Dallas, Los Angeles and Las Vegas. After US, UK, Singapore and Malaysia are equally popular with realty investors. SAARC countries like Mauritius, Bhutan and SriLanka which are popular tourist destinations are also on the radar.

However, before one plunges into any realty deal abroad, it’s good to know a few things:

  • Suburbs are surely more cost-effective, but one must investigate its appreciation potential.
  • Neighborhoods make a big difference to rent and sale values. Ensure that the neighborhood within in a radius of 3 miles from your desired property is fairly good.
  • Needless to say, the property must not be too old, must be free of litigation and have clear titles.
  • It’s also better to invest in property owned by institutional investors rather than individual property owners.
  • It’s better to have joint ventures with local citizens, as against going solo.

Buying realty in a foreign country is a great option. But one must be aware of legal loopholes, regulatory controls, and procedural hassles in any destination, before investing there.

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