Real estate investment has always been a favorite asset class for Indians, and that love does not wane even when he becomes a non-resident Indian (NRI). The reasons are not too far to seek: the NRI understands the lay of the land, and at the back of his mind, the desire to own property back home, if he needs to retrace his steps to his homeland, remains strong.
Of course,attractive growth rates in property prices and the seeming invincibility of this asset class (you rarely seem to make a loss, since you are willing to hold for long periods of time) are a couple of other strong reasons for this kind of investment. The investment in an apartment starts depreciating virtually the moment it is completed, including cement and steel that are subject to wear andtear. The value of a flat or villa rises because of the appreciation in the value of land, and the inflation factor. Logically then, an investment in land results in pure appreciation, but along with that come the risks of encroachment, clear title and the fact that this becomes a non-productive investment (not capable of generating rental income).
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