Real estate experts advise NRIs to avoid FOMO, consider renting first, and factor in delays and rupee depreciation before investing in India
A Hyderabad real estate investment made by an Indian-origin couple living abroad has drawn attention for delivering poor returns over a 15-year period. Despite selling their apartment at a profit in rupee terms, the couple found their annualised return in US dollars was just 0.5%, raising important questions for NRIs considering property investments in India, reported hindustantimes.com.
The couple had invested in a 3BHK apartment at Mantri Celestia in Nanakramguda in 2010, paying ₹59.34 lakh over nine years, with an additional ₹5 lakh spent on repairs. Their total investment stood at ₹64.34 lakh (around $111,740 at the 2010 exchange rate of ₹45/USD). They received possession in 2019 and sold the flat in 2024 for ₹90 lakh. After deducting taxes and broker fees, their net gain was minimal—just $8,260 more than the initial investment.
NRI couple earns just 0.5% annualised dollar return on Hyderabad property; financial planners urge caution and realism in Indian real estate investments.
Over five years of ownership post-possession, the couple also earned ₹12 lakh in rent. After tax and maintenance, the net rental income was only ₹7.2 lakh (around $11,200). Their total income from both rent and resale added up to approximately $120,000—barely above their original investment.
Reflecting on the experience, the investor noted that had they put the same money in an S&P 500 index fund, the investment would have grown to over $210,000. “It’s a lesson in opportunity cost and the risks of rupee depreciation,” they wrote.
Reddit users chimed in, warning fellow NRIs against making rushed decisions. “Rent first. Don’t buy immediately after moving back,” one advised. Another user described how their relative overpaid for a property in Hyderabad due to FOMO and has been unable to resell even at breakeven.
Experts caution against relying on projected returns without accounting for staggered payments or home loan costs. Suresh Sadagopan, financial advisor at Ladder7 Wealth Planners, emphasized that real returns are often far lower than advertised. He noted that rupee depreciation can erode gains when funds are repatriated. “If the rupee depreciates by 4% annually and property returns 9%, the effective return in dollars is just 5%,” he explained.
For NRIs, Sadagopan recommends weighing all costs—loan interest, maintenance, property tax, and remittance fees—and focusing on assets that significantly outperform rupee depreciation. While real estate can diversify a portfolio, the emotional and financial trade-offs must be carefully assessed, especially for those planning eventual repatriation.
