Bengaluru: Non-resident Indians (NRIs) encounter significant challenges when managing their real estate assets in Bengaluru, prompting some to consider divesting. The lure of commercial real estate (CRE), characterized by substantial capital investments and attractive returns, has eclipsed residential investments for NRIs. The shift towards CRE can be attributed to the concept of fractional ownership, which has emerged as a pivotal factor in altering NRI investment preferences.
Real Fynd Property Management Services presents a compelling solution to the challenges faced by NRIs in managing their real estate investments.
One NRI investor, Dr. Renuka Divakaruni, who has been involved in real estate investments for over 15 years, is contemplating exiting her Bengaluru property investments. She cites the persistent issues of opaque and protracted paperwork, coupled with local regulatory complexities, as the primary hurdles faced by NRIs seeking to transact in Bengaluru. This bureaucratic quagmire has become a major impediment to property transactions in the region.
Beyond the bureaucratic hurdles, NRIs also grapple with the complexities of maintaining rental residential properties. Kiran Kumar, Vice President at Hanu Reddy Realty, notes that many NRIs made their investments when the rupee was considerably stronger against the dollar. Exiting these investments now entails lower returns due to the 20 percent Tax Deducted at Source (TDS) levied on them. This, combined with high capital costs in prime locations and impending elections, dissuades NRIs from reinvesting in residential properties.
A recent survey conducted by SBNRI Technologies Private Ltd revealed that approximately 24 percent of NRIs face challenges when managing rental properties in India. While 6 percent of NRIs in countries such as Canada and the US also encounter tenant-related issues, 7 percent opt to delegate tenant management via power of attorney to family and friends. Additionally, some NRIs undertake the onerous task of inspecting and maintaining their rental properties during visits to India.
As the challenges of property management become more evident, NRIs are increasingly seeking the assistance of property management companies in Bengaluru. However, the substantial capital involved in real estate investments gives rise to trust issues in dealing with these companies.
For NRIs, the quest for higher returns has led to a growing interest in commercial real estate. According to Balaji Badrinath, Managing Partner at the local office of Coldwell Banker, the returns on residential real estate in Bengaluru hover around 2 percent, while commercial real estate offers a more attractive 6 percent return. Nevertheless, the high capital requirement, averaging over Rs 15 crore, poses a formidable barrier for NRIs entering the CRE market.
The SBNRI survey indicates that 52 percent of NRIs are considering CRE investments to diversify their portfolios within the Indian real estate landscape, making CRE the preferred asset class. Fractional ownership has emerged as a key facilitator in the shift towards CRE, allowing multiple investors to pool their funds, starting from as little as Rs 25 lakh, to collectively purchase Grade A commercial properties. This innovative approach liberates NRIs from the need to commit massive sums, typically ranging from Rs 5-10 crore, to acquire commercial real estate.
Notably, NRIs from different countries exhibit varying preferences for CRE investments. Singapore-based NRIs, at 9 percent, and UK-based NRIs, at 8 percent, outperform their residential sector investments, accounting for 6 percent. In contrast, UAE-based NRIs, with 7 percent, show a stronger inclination towards CRE investments than residential properties, which attract 9 percent of their investments.
Real Fynd Property Management Services
Real Fynd Property Management Services offers a compelling solution to the intricate challenges faced by NRIs in managing their real estate investments in Bengaluru. We understand that managing properties can be time-consuming and overwhelming, but fret not! Our dedicated team of property management experts is here to handle all the nitty-gritty, allowing you to enjoy the rewards without the hassles.
1. Tenant Screening And Onboarding
We find reliable tenants who treat your property with respect and pay on time. We take care of the property visit, tenant background verification, and onboarding.
2. Rent Collection And Accounting
Our systematic process ensures timely rent collection and transparent financial reporting.
3. Legal Documentation
Leave the paperwork to us! We handle all legal documentation and ensure compliance with local regulations.
4. On Demand Maintenance
From routine inspections to emergency repairs, we keep your property in top-notch condition.
