Around 24% of NRIs encounter hindrances while managing rental properties in India, with 8% UK-based NRIs dealing directly with the tenants, followed by 7% NRIs from Australia, revealed a new survey.
On the other hand, 6% of NRIs from Canada, the US and other countries have to undergo the similar issue of dealing with tenants directly, while 7% of NRIs from Canada followed by other countries transfer the burden of dealing with tenants via power of attorney to family and friends, outperforming the previous 6% of self-rental management hassle.
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SBNRI, the NRI-focused fintech platform, recently conducted a survey to reveal the frequent challenges faced by NRIs in managing their rental properties remotely.
The survey added that the Indian real estate market is witnessing substantial interest from NRIs, owing to the surging rental yields that have recently shot up from 2-3% to 3-5% and ongoing rupee depreciation. It presents a lucrative investment opportunity for NRIs which is also driven by emotional connection and innovative marketing and sale efforts by realty majors.
In addition, the digitisation of the industry has made it convenient for NRIs to explore, evaluate and invest in properties remotely, positioning the Indian real estate market as the latest hot spot.
While NRIs are well aware of this scenario, they are forced to rely on their resident friends and family for advice and execution around- purchase, rent, tenant search, police verification and much more.
Key highlights of the survey
The survey also unveiled that 9% of NRIs from other countries, 7% from Australia, followed by 6% from the UK have to connect with tenants and collect the rental amount in the NRO bank account.
On the contrary, 7% of the US-based NRIs delegate a POA to streamline the process of rent collection. While this number remains significantly higher for US-based NRIs, only a minute fraction of NRIs from Australia, Singapore, Canada and other countries delegate POAs and prefer completing the rent collection process themselves till a better alternative appears.
Though the Indian real estate industry comes with its concrete set of property ownership regulations, 7%, 6% and 12% of NRIs from Canada, Singapore and other nations respectively failed to encounter any sort of obstacles related to property ownership regulations.
While the 5% and 4% of NRIs from Singapore and Canada respectively met with property ownership regulatory challenges, property managers helped take away the onus of such struggles.
Mudit Vijayvergiya, founder, SBNRI said, “While India has become the leading destination for NRI real-estate investments offering a unique marketing opportunity, issues like rental property management, property ownership, rent collection, inspections and maintenance and other limitations are actively restricting NRIs from experiencing a seamless rental property management journey.”
The SBNRI survey report also disclosed that 4% of Singapore, US and Canada-based NRIs conducted the inspection and maintenance of rental properties themselves during their visits to India.
On the contrary, only 4%, 3%, and 1% of NRIs from Canada, Singapore and the US respectively delegate the task of inspection and maintenance to POAs while the other 5%, 3%, and 1% of NRIs from the US, Canada, and Singapore respectively relay inspection and maintenance duties on Property Managers. Lastly, 4% of Canada and Singapore-based NRIs and 5% of US shift maintenance responsibilities on tenants.
There is no denial of the fact that 21% of NRIs from major countries have faced tenant disputes while only a fraction of NRIs have been untouched by the pangs of tenant squabbles.
The overall survey results indicate that the challenges faced by NRIs in the effective management of rental properties in India require an innovative solution to streamline and optimise the management process, in order to witness astounding progress in NRI investments in the Indian real-estate landscape.
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