Real estate has always been a desired investment asset set for Indians, counting those staying overseas who buy landed assets for rental earnings. In addition, of late, NRIs with advanced buying power are lapping up extravagance homes together with economical homes, as they provide capital appreciation and enhanced rental income. As per a recent report, inexpensive housing is expected to give returns of eight to ten percent for NRIs followed by three to five percent for luxury, six to eight percent for mid-segment, and two to three percent for ultra-extravagance properties.
Before the slowdown, the return in investment on residential property was very much satisfying for NRIs. But, after the slowdown, which was worsened by the GST, the RERA, and note-ban, there was a pattern shift in wealthy NRIs focus particularly, towards commercial properties as they assure far higher yields. But in the subsequent year there was a fairly decent recovery in the residential sector and today, NRI investors are also focused on reasonably priced housing for rental income and better long-term appreciation. The common trend today is that the NRIs, mostly end-users are looking at purchasing now and also putting them on rent in the starting and some years down the line if they choose to return to India, they could live in them.
Thus, for NRIs, the real estate continues to be an end-user driven owing to location and unique product offering. Moreover, the demand for smaller units such as 1 BHK for rent in Bangalore, India and 2 BHK flat for rent in Bangalore, India is on the rise with inventory being sold off in record times.
Tips for NRIs to give their property such as 1 BHK for rent in Bangalore, India:
No doubt that renting a property assists not only to generate an added income but also to decrease the chances of maintenance problems which tend to develop in an unoccupied house. What took NRIs so long to understand the advantages of renting out their properties back home? Problems such as tenant not vacating on time or refusing to leave have become widespread, which has held back NRIs from letting out their properties. But, there are no perfect methods which can guard landlords against such problems, one can take care of some steps to guard the property and reduce the risk.
Here are some tips one should keep in mind before giving 2 BHK flat for rent in Bangalore, India if he/she is an NRI:
- Background check: Make sure an appropriate background check of the occupant before letting out the property. You should try and check details, for instance, the previous address of residence, employment records, etc.
- Do not decide on first communication: Confirm the agreement only after guaranteeing that proper background check and documentation has been done from your side. Never plan to rent out your property based on the first impressions.
- Notify the local police: While renting out the property to a stranger, you should notify the local police as many cities in India demand this by rule.
- Expert help: Discuss with a specialized lawyer rather than a real estate broker while drafting the contract
- Power of attorney: It is suggested to have a power of attorney in favor of an individual residing in India who can take care of your lawful formalities in your absence such as signing documents or carrying out any dealings, for instance, renewing agreements, etc.
- Registration of agreement: Register the agreement according to the prescribed legal norms after paying for the necessary stamp duty. This is essential as a non-registered agreement would not offer you any type of protection.
- No Objection Certificate: You must get a NOC from society to avoid future complaints.
- The timeframe of contract: The perfect legitimacy of a rent contract is eleven months. In case you are contented with your present tenant, then it can be renewed after that period.
Whether giving 1 BHK for rent in Bangalore or 2 BHK flat for rent in Bangalore , India, it is important to note that there are essentially two types of agreements:
1) Rental Lease Agreement
In this, the rental amount is managed by the existing rent laws and as far as a lease agreement or rental legislation laws are concerned, the renter can sublet the property to a third party. In case the proprietor of the property dies, the lease agreement would not be completed.
2) Leave and License Agreement
Here, there is no power over the rent and the premises cannot be sublet by the renter. In case the owner passes away the agreement gets concluded automatically. Additionally, when the rental period is over it is simpler to expel the tenants. As a result, it favors the owner and guarantees his/her safety.
Besides the sentimental attachment to the home country, the viewpoint of eye-catching rental income is also a major driver for NRI demand. It is believed that every Indian, even though he is not sure when he will return or might stay forever abroad, always has a sentimental attachment with his place of birth and wants to have his roots unharmed.
Also, appreciation of properties in India is going upwards constantly and being a growing economy, this procedure will continue in the coming decades. Rates of properties in most of the developed countries are decreasing and looking at the tendency of the GDP and general development of the financial system in those countries, there is no symbol of appreciable development predictable in near future.
Furthermore, NRIs have discounted access to funds. They receive home loans at very low-interest charges which are around four to five percent which is easily available. Rental profits are also very smart; this is one motive why NRIs are interested in purchasing. In Bangalore, it has been witnessed that on an average fifteen to twenty percent of the project bookings is done by NRIs. There is significant interest being revealed by NRIs looking to return to the country. A huge segment of the inquiries is coming from NRIs originating from Gujarat, Pune, Karnataka, and Mumbai. The demand trend is active and showing a specific upward curve.