The Rise Of "Virtual Land Lording"
The current proptech companies have seen a rapid increase in queries from NRI investors
For years now, real estate investment has been viewed as a safe bet. Non-resident Indians (NRIs) find it lucrative to invest in real estate in India, whether for nostalgic reasons, the related tax benefits, or the exposure that buying Indian rupees provides relative to other currencies, even if they have relocated to a foreign country. The general consensus among NRIs is that investing in real estate in India is a prudent decision. Throw into the mix the devalued rupee caused by the pandemic and low-interest rates, and it's a good deal.
However, investing in property comes with logistical problems that demand a great deal of time, effort and maintenance. There are many factors to consider, whether it's discovering the ideal property, preparing it, locating the best tenants, or locating a perfect person or expert to manage the property. Add to this India's lack of transparency, property maintenance, tax difficulties, legal obstacles, tenancy maintenance, etc. Occasionally, family members and trusted friends in India may operate on their behalf based on a power of attorney to help execute and provide advice regarding significant steps, such as buying, selling, creating rent agreements, maintenance, painting, searching for tenants, and navigating tax law changes, etc. Additionally, because they are engrossed with their own lives, it may be difficult for them to seek support from friends or relatives.
And this is where "virtual land lording' comes in. The current proptech companies have seen a rapid increase in queries from NRI investors. Moreover, proptech platforms permit owners to virtually onboard renters with property photographs and video walkthroughs despite lockup constraints. Such changes have also prompted the development of new services, such as "full property management."
Difficulties with remote property administration and ownership
While ownership of multiple properties is an excellent way of generating income and creating wealth, in the long run, maintaining these can be a big challenge. This gets even more complicated if you are an NRI and thus not residing in the country.
While family and dependable friends in India can and do serve as their power of attorney to execute and advise on crucial stages, such as buying, selling, creating rent agreements, maintenance, painting, tenant hunting, navigating tax regime changes, etc. It does create problems for them to do this on a long-term basis, more so when they are busy with their own lives.
However, those who do not have such assistance are forced to manage by themselves, which sometimes has detrimental effects. Without routine property inspections, property damage can go undetected and eventually become costly. Additionally, nothing is more detrimental to tenant retention than sporadic maintenance.
Growth of 'Virtual Land Lording'
Currently, there are no restrictions on the number of immovable properties that NRIs and OCIs can own in India, as well as other benefits such as no tax consequences. This makes owning properties a lot of financial sense for NRIs, who in turn look at prop-tech firms to guide them in their investments.
In addition, proptech platforms enable landlords to digitally onboard renters with property photos and video walkthroughs, notwithstanding limitations imposed by the pandemic; these remote tendencies have also inspired the introduction of new services such as 'complete property management.'
Strong real estate investment
The weakness of the Indian rupee coupled with bullish demand in the real estate business has created a massive demand for virtual land lording. Recent projections indicate that $13 billion will be invested in the Indian real estate industry, which is projected to increase by 12 per cent and reach $15 billion by FY22. These figures look very promising. Demand from HNIs and NRIs for more real estate is coupled with the increased availability of virtual land lording to take away the day-to-day handling of investments while also guarding them from becoming a liability. And in doing so, prop-tech firms help them make this investment a means of generating further wealth and a source of monthly income. These advancements and the growing trend of 'virtual land lording' is making investments in real estate easy, convenient and adding more transparency in the system.