|O dear to me my birth-things—All moving things, and the trees where I was born—the grains, plants, rivers;|
|Dear to me my own slow sluggish rivers where they flow, distant, over flats of silvery sands, or through swamps;|
– Walt Whitman, “Longings for home”
Home is a special word that evokes feelings of warmth and nostalgia for most of us – of joyous summers spent with grandparents, riding on Dad’s Vespa and visiting the local cinema, of sitting on the kitchen sill and tasting mom’s cooking, of climbing over the compound to meet friends.
Many Non-Resident Indians (NRIs) who have left the shores of India for years, even decades, hold on to property back ‘home’ as they hold such precious memories. Added to that, the recent sheen of India as an emerging economy – a beacon of growth in the region, indeed the world – has meant that NRIs have joined the bandwagon and invested their hard-earned dollars in hyper-growth metros such as Bangalore, Hyderabad or the NCR.
But inheriting or buying property is one matter and maintaining it is quite another one, as many NRIs have often discovered to their dismay. Based on our interactions with scores of NRIs, PIOs and expat Indians, here are the top five headaches that ‘remote’ management of Indian property entails:
- Documents, documents and documents: You may think you have left India’s redtape behind, but as a property owner be prepared to keep your vocabulary of ‘khata’, ‘paani’, ‘sale deed’ and other words. India has a complex legacy system of land ownership, that varies from state to state. Rajasthan is the only state to have brought in legislation to streamline it. Till this happens nationwide, owning property can be a daunting task, even locally.
- Tenants from hell or beyond: A house or apartment sitting vacant is a dead investment. With this thought, many property owners look for a tenant or lessee who can maintain the property and bring in some revenue. But most tenant-owner relationships turn sour fast, especially over maintenance issues or rent increases. Being a remote owner learning helplessly that a tenant has trashed your property can be devastating.
- Maintenance! What maintenance? Talking of maintenance, all properties – whether rented out or not – need regular maintenance and oversight. If you’re relying on a local relative or friend to do this, you may find that their definition of maintenance and yours varies.
- Trespassers, squatters and more – When the neighbourhood ‘smells’ that the property owner is away overseas, trespassing may start with stealing the flowerpots in your garden. Some property owners have discovered squatters living for months – even years – on property they’ve not visited often.
- The ups and downs of real estate markets – Real estate markets in India suffer lows and highs similar to all markets worldwide. The trigger points may be local to India (e.g., the recent demonetization in 2016) or hyperlocal to the area (e.g., pollution in Bellandur lake may affect real estate in that area). Buyers and sellers must be cognisant of these fluctuations and catch the right point in the curve to make their transactions. Otherwise, you may buy too high or sell too low, hurting your ROI.
Such pains can often overtake feelings of nostalgia and sentiment and force NRIs to sell their property – often at below-market rates.
It need not always be so. Put together a carefully thought out property management plan before you buy in India. Of course, if you inherit property, you must plan as well. Here are the critical questions for which you must have ready answers –
- How do you want your property maintained? Who will maintain the property? What is the frequency of maintenance? What will the proof of maintenance be? How will you pay them?
- Who will ensure documents are ‘pakka’ and pay regular property taxes?
- Who is your local nominee who will regularly visit the property and ensure it is secure?
- If you plan to rent out your property, who will do rental management?
- If you plan to sell your property, who will be your trusted agent?
Friends and family are often ready to help out, but remember that long-term management can become a chore and imposition. An aged parent may not want to take on this responsibility-have a frank talk.
Best of luck with your property. Remember: home is indeed where the heart is, so good property management is like heart health – regular diligence and attention will pay off in the long run!
– Prashanth Bhat
Mr. Bhat is a Co-Founder of Propadis, a new-age Property Management service designed specifically for overseas Indians.