With so many new properties coming to market, an increasing number of NRI investors are opting to buy and hold for a 3-5 year cycle to maximise returns.
Statistics show that NRIs have an increased interest in investing in new real estate developments in India, and for those looking for somewhere to park their money so that it earns a handsome return, this strategy may be just the ticket.
India offers a great deal to investors looking to maximise their return on investment; affordable mid-market property, a slew of new and existing markets in which to buy, and a large range of new developments slated to provide impressive CAGR. In light of the recent election results, NRI real estate investment is on the up, with many looking to acquire property within the next three to six months, with a view to holding it for three to five years.
Why real estate investment?
Of all the potential ways to earn income, NRIs are evaluating property over stocks or REITs, for many a good reason.
The capital appreciation rates in India are hard to reckon with. Few other investments return such as impressive figures, and this rate of growth has generally remained stable even in the face of the global financial crisis. While a buy and flip strategy can work in certain markets, there are a few benefits to it.
Resale properties in desirable markets tend to come with an off-putting high price tag, not to mention these markets are often mature, posing little or moderate price growth in comparison with up-and-coming areas. Buying new properties now while development is ongoing enables investors to take advantage of higher rates of growth over a longer period, maximising the return on investment. And while rental rates aren’t astronomical, there is still the potential to generate cash flow by renting the property out, especially in popular tourist destinations such as Mumbai or Goa. As a result, buying new and working with a maximum five-year exit strategy seems to be the most lucrative option for investors.
Today, investment in Indian real estate makes more sense than ever before for NRIs. A favourable exchange rate aside, the new-found optimism in the market along with the increase in foreign investment will enable those looking to buy now to maximise the returns. Holding for a three to five year cycle will see income generation through rent in the short term, and impressive capital gains in the long term.
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