nri property management Archives

How S2NRI Help NRIs in Property Management?

May 31, 2022 Manoj Sodhani Comments 0 Comment

Property management is a practice of managing things involved in controlling, maintaining, and oversight of the apartment, house, bungalow, or any piece of land. These practices are applicable on residential, commercial, and real estate land.

Thanks to organized consultants and agencies that take care of these fixed assets as their own while adding more values like finding tenants!

Reasons why you hire S2NRI an NRI property management

Do the Paperwork

Renting a house requires police verification of the tenant. If possible, do seek the office identity of the tenant during screening for avoiding any problems in the future. Cover all necessary details like name, address, parents’ details, monthly rent, and all assets in the house. However, managing all of these things is cumbersome. Here, the expert non-resident property consultant can help.

Address Tenant Issues Easily

Tenant management can be a big challenge, and it can be more troublesome if you’re abroad. This process involves screening him, collecting rent, addressing disputes among different tenants, and maintaining the accommodation. Hiring a property manager can let you get off these challenges easily and quickly.

Odd Hour Requests

Requesting the landlord at 1 AM for letting in or sending a duplicate key can be difficult. Unaddressed odd-hour requests can lead to break-ins or evil practices. Apart from that, the sudden sewage blockage or fire, or short circuit may cause big trouble, which needs immediate solutions.

Legal Support

NRIs emigrate, which makes tenancy management difficult. There are many legal concerns associated with paperwork, tenant screening, renewal, and eviction for being unable to pay rent. From distance, managing these things is not possible. Here, Services 2NRI comes into play, which offers legal and liaison services to NRIs. This is how we protect them from hassles that often appear in managing the property.

Property Maintenance & Repair

The most obvious reason to hire a property management agent is its timely maintenance. Not only does it keep the real estate maintained, but it also attracts prospective tenants who become ready to pay a high rent. From mending a wall or plumbing to renovating the entire premise-all matters associated with it can be resolved in a short period.

Enable Tenants to Manage Supplies

Most of the real estate management agents have contacts with vendors in the local area, which enable tenants to manage supplies of goods and services effectively. Property managers assist in availing housekeeping and supplies of commodities via trusted contacts of vendors, merchants, or suppliers.

Evicting Tenants without Hassles

Making tenants vacate the NRI property can be a nightmare. It requires patience, experience, and effective strategy. The property managers foresee the prospective challenges like delaying rent or confiscating the house. They take all legal steps before accommodating a tenant, which covers on-paper screening, renting, and rules to stay in. These practices help in maximizing rental income with the least requirement of any legal action. Besides, you may revise the rent as per the market trend.

Rental Income Tax

Rental income from the property in India can be taxable, as it is categorized as a capital income. You may find paying property tax tedious because it requires a lot of paperwork, forms to avail claims, and visiting the tax department frequently. Here, you cannot do the plus and minus on your own. So, you need an expert advisor. Hire us to get end-to-end assistance on property-based tax deductibles.

One Time Investment for Lifelong Income

Property is the only thing that does not perish. Nor does its value decline. It consistently rises. The non-resident community requires professional support and consulting over its valuation and modification updates. This knowledge can improve the rental income, impacting maintenance and insurance costs.

Fill the Gap Between Tenant and Landlord

Property management in India needs expert managers who have all capacities and clarity over the related matters. Their expertise can help non-residents resolve real-estate-related matters over the phone or by physically visiting there if required. In addition, these experts can easily discover fake excuses or over smartness of tenants by arousing sympathy at the time of rent payment.

Consistent Source of Rental Income

The non-resident community often invests in real estate for seeking passive income. This is a bumpy way, which has a ton of hassles, especially in paperwork. A property management consultant can enable them to own and manage it effectively for a regular passive income without personally handling tenancy and legal responsibilities.

How does Services 2 NRI help emigrants manage property in India?

Services2NRI has been here for years, addressing non-residents’ concerns about tenancy and property management. We understand how challenging it is to effectively manage your farmhouse, apartment, or any property remotely. Our legal experts and consultants help you to have a peace of mind while having end-to-end assistance in:

Buying & selling
Utility bill payments
Statutory Payments
Property Monitoring
Rental Agreement Assistance
Property Management – Others
Encumbrance/ Khata/Patta, 7/12 Certificate
Tenant Management/ Vacating Inspection

How to protect NRI property in India?

Deploying a property manager can help you in protecting the property in India. He can help you with all of the following things:

Discover Verified Tenants

Accommodating a house requires a tenant. But, this can be a wrong decision if no proper verification goes on. The screening is necessary, which cannot happen remotely. Here, the experienced agent can help in screening the tenant properly if he has a clean record.

Regular Check-up of the Property

There may be the case of an unconstructed or vacant property. These agents can regulate the monitoring of your property to check if the property is intact and unoccupied. In case of any illegal acquisition, these agents timely inform and protect the property.

Timely Rent Collection

Calling tenants every month is annoying. Hiring an expert can take this responsibility, and you just sit back, having peace of mind while adding more capital through a passive source of income (i.e. rent) every month. The utility bills are also paid by them on time.

Fix Interiors and Maintain

Renting out your fixed asset can help you keep your house maintained cost-effectively. Moreover, it’s not a painstaking experience to personally come down here, compromising on work and investing a massive amount in your property maintenance. The professional consultants support in all of these matters while saving hundreds of dollars.

Liability Payments

Leasing out a property pushes you to monitor the timely payment of utility bills. The experienced consultants take all responsibility for coordinating your liabilities like property tax & khata, etc.

Tips to Consider Before Drafting a Rental Agreement

December 30, 2021 Manoj Sodhani Comments 0 Comment

What is a Rental Agreement?

It’s a legal contract of the rental between a landlord and a tenant. It states the guidelines for temporary possession of the property. This agreement differs from a lease, which is for a fixed term.

This contract plays a key role in settling down the conflicts between the tenant and the landlord. Sometimes, their relationship turns bitter due to complaints and misunderstandings. This agreement becomes crucial in resolving the matter.

Who should draft this rent agreement?

This agreement can be drafted by either the tenant or the owner of the property. In the case of NRIs, the property management company will be responsible for it.

It requires registration from the court or sub-registrar office. However, it may be notarized.

There are certain things that should be taken into account before renting out a property or drafting a rental agreement. Below are a few requirements for it.

Requirements for Drafting

To draft the rental agreement, you need to follow these steps:

Openly talk & discuss important matters like rent, security deposit, maintenance charges, etc.
Roughly draft with details like names of both parties involved in the agreement and address of the property.
Mention important clauses in the document.
Purchase a stamp paper of recommended value. Print what you have drafted on the stamp paper.
Get the paper signed by both tenant and landlord in the presence of two witnesses.
Visit the local sub-registrar office to get it registered.
In case of NRIs, a Power of Attorney in the name of the NRI property management agent or company will be required.

However, the cost drafting can be equally shared between the property manager and the tenant. The metropolitan (like Delhi) citizens have to get it legally registered to avoid a penalty of INR 5000. Or, the landlord can be imprisoned for three months because it would be a violation of the Delhi Rental Act Control.

How does an ideal rental agreement look like?

The ideal rental agreement should have a list of clauses that avoid any type of disputes or conflicts. For this reason, it should not miss out on a few key points, which are here for your concern:

The ownership agreement should be properly documented, and a copy of the similar one should be attached during the registration of the rental property.
There should have a clear mention of the contract period of the rental property. The notarization can be sufficient if the period of the agreement is less than a year. In case it exceeds, the registration from the sub-registrar office is a must.
Both parties should agree on the drafted terms and conditions that apply to both the tenant and the landlord.
All facilities, utilities, and appliances should be listed out in the agreement, which is likely to e offered to the tenant.
Do mention the provision of the repair and maintenance of utilities. This agreement should clearly read out the state of responsibility of payment for repair and maintenance.
This paper should state a crystal clear amount of rent and deposit. In addition, there should be scenarios wherein the landlord can terminate the contract and withhold the security deposit.
There should be a clear mention of restrictions that the landlord may put on the tenant. It could be anyone related to the choices of food and the guests of the opposite gender coming to the property.
The rent agreement should clearly read the purpose of the rented property. If it’s a commercial building, it cannot be used for a purpose other than any commercial purpose. There should be a written approval of the owner if one is using it for some other purpose.
Furthermore, this contract should be renewed at the end of every 11th month. There should be a track record of the security deposit and refunds if the agreement lapses.

Types of Rental Agreement

Rental Agreement

It is a commonly used document when a landlord agrees to accommodate his property to a tenant on rent. The purpose is only renting a residential property. This document is essential to form a favourable environment with the assurance of security from the lawsuit.

The tenant has to pay out a security deposit, which is refundable in most cases. Apart from that, there should be a monthly rent to be paid to the owner. This agreement ends in 11 months and should be renewed at the end of this tenure.

Lease Agreement

This agreement is crucial when a party accommodates the property for a particular number of years. The period of the agreement should not be less than a year. In this case, the monthly rent or security deposit is not required.

It is simply because the lump sum amount is paid to the owner. The owner parks this amount in the bank and earns interest on it. As the tenant vacates the property, the least amount is released to his account.

Commercial Agreement

The commercial agreement is drafted for accommodating property to carry out commercial purposes. The tenant is not allowed to rent it out to another party. In this case, also, the security deposit is a must, which should be paid before renting the property. Besides, the monthly rent should be paid in the account of the owner.

In the case of the lease agreement for the commercial space, it is a must to pay the lease amount before renting the property. As the lease expires, the tenant may receive the lease amount without any interest.

Why Should You Hire a Property Monitoring Company?

October 6, 2021 Manoj Sodhani Comments 0 Comment

Property management or monitoring refers to leveraging the expertise of operating, proactively controlling, maintaining and overlooking the real estate or any physical property that is residential, commercial and land real estate. It’s similar to business management practices.

Now-a-days, people hire any third party professional to expertly perform all of the foresaid duties and responsibilities with a complete accountability. They want their assets to be cared as if these are their own. In essence, it represents a complete cycle of managing your land or fixed asset.

Licencing Service

Property management services are a licencing job in many countries like Australia, USA, Canada, Germany, British Columbia and many other nations. On the flip side, there are countries like India where this practice is not legally regularized properly.

Where it is legally regulated, the property assistant companies and agents have to apply for the licence to pursue working in this domain. It ensures that the assistant is well-prepared for taking challenges in this field. So, it’s essential to get registered as a land agent where it is a part of legislation.

Main Property Management Practices

This practice involves the following processes:

Property evaluation
Rental property
Handling tenant inquiries
Screen applicants
Select suitable tenants
Draft a lease agreement
Conduct inspection
Move the tenant into property
Collect rental income
Coordinate any maintenance issues
Supply financial statements to owners
Take care of property taxes on-time

Why to hire a property management company?

Here is the roundup of the reasons for hiring a property management company or agent for caring & managing it:

Tenancy management

Screening the tenant’s records, collecting rent, sorting conflicts or disputes and resolving matters between tenants and other people cover all responsibilities of a property manager. Since it’s a job of intense patience, he needs to be friendly, calm and gentle in administering these concerns quickly.

Meeting odd hour essentialities

There might be a possibility of requiring property keys or any other essential things like water blockage or shortage during odd hours. The tenants may be caught up in the problem and hence, need the assistance to get off the problem. Circuit breakdown is one of the most commonly seen problems that often trouble tenants. The efficiency agents mark their availability during the need.

Legal support

Legal support is mainly concerned with non-residents because an experienced property management agent can get them through any legal hassles in no time. He is professionally trained in tackling these legitimacy barriers, such as evicting tenant in the pursuit of due amount of rent. They are also capable of offering legal and liaison services to ensure that the administration of the owner’s property is in the right hand.

Maintaining property

The most obvious reason to hire a property management company is to timely repair and maintain owners’ fixed asset. The renovated or fully furnished property easily attracts potential tenants who become ready to pay the desirable amount as a rent. So, it’s worth to have an expert on your side that is able to take the charge of meager cracks filling to plumbing requirements.

Professionally managing daily needs

Sometimes, tenants may have to suffer on and off delivery of commodities or groceries at the doorstep. These unpunctual services can annoy tenants and they may think to shift. So, some property managers come out handy while handling this issue by using his good contacts with reputed vendors, retailers or suppliers.

Put efforts in finding the best-fit tenants

The innovative and effective digital marketing strategy can appear in a great role when it comes to accommodating any property with tenants. With social media and search engine local ads, the manager can effortlessly invite tenants at the best rental amount. Here, he can leverage on the cosmetic enhancements of the place in the ads that maximizes the rental income.

Tax assistance

Managing property tax is a challenging job, which the experienced property management companies can easily carry out. With the industry experience, they can come with the expert advices on claiming deductions and procuring essential supporting papers & forms to avail the tax return claims. Do find out if the property management is taxable or not.

Elevate values of the asset

The property is something whose value continues to go up over time. The need is to seek advice timely on this matter from the professional property assistant. Being aware of the local market, they know the exact value or how much it has increased and what the scope of increment in its value is. Ask for their opinions on how you can enhance the rental income or its overall value.

Fill up the gap between tenant & landlord

People often hire the professional caretaker of their property for conveniently and more often interact with tenants. The middleman is able to conveniently represent the owner over the phone or in-person for listening to their concerns and issues related to the real-estate. He can hold them back from making false excuses or creating emotional drama for postponing or delaying rent payments.

Bring rental benefits with peace of mind

A support in any form is a blessing. The real estate assistants are likewise, as they monitor the passive source of income (rental income) for owners. Despite being not-so-easy, they combat all hassles or troubles that come their way while overseeing the residential rental and maintenance. He bears all legal responsibilities to credit it to the account of owner & accommodating new tenancy quickly.

If you have any concerns related to property monitoring, Services 2 NRI is here to provide a professional assistance anywhere.

NRI Property Selling-Based Tax Exemptions in India

October 11, 2019 Manoj Sodhani Comments 0 Comment

The Indian diaspora in the foreign might have a score of queries regarding the property selling and their tax implications. Many of them often fail to access accurate information over it.

This blog covers all those pain points and the areas capital gains & exemptions on them after selling the property.

Let’s begin with a very common scenario wherein an Indian is shifted to the U.S.. Although he is living there, he has been managing property in India. While managing that property, he has been generating rental income for a fair four years. In legal terms, it is a long term capital gain for him.

Go through the difference between long term and short term capital gains.

Long term capital gains- These are the gains that one can get through rental income upon owning the property for the minimum of 2 or more years.
Short term capital gains-These are similar to long term gain, but the ownership of the property will be less than two years old. The rental income generated during that tenure will be termed as a short term capital gain.

NRIs deduct TDS on the sale of property:

The tax will be deducted according to long or short term capital gains. The cases of inherited property would not be barred from the TDS.

The long term capital gain shall be taxed 20%, whereas the percentage for short term capital gain shall be 30% in India. When the NRI sells that property, the buyer shall have to deduct the TDS.

In the meantime, the non-resident can claim for exemption under Section 54 and Section 54EC. But, this exemption is valid for long term capital gains sourced from the sale of the property in India.

Tips to win exemptions from long term capital gains to save tax on the sale of NRI property:

There are certain terms and conditions drafted regarding the sale proceeds of the property and exemptions. Upon satisfying these conditions, you can win them:

Invest in the property within one year before the date of transfer or, wait for years after that
Construct a house within three years after the date of transfer
The constructed property would remain unsold within three years of purchase
The new purchased or constructed property shall be located in India
You do have more than one residential property on the date of transfer
You do not invest in the new property within a period of two years or construct within a period of three years after such date

Once you satisfy these conditions, no tax on the capital gains would be levied. And, if you invest a part of the sale proceeds, the exemption will be proportionate to the invested amount to the sale price or exemption.

Tax exemption on the sale of NRI property under Section 54EC:

What if you do not want to invest in the property again?

Well, you still have an option to save on tax in such case. You can invest in certain bonds, which are:

National Highway Authority of India (NHAI)
Rural Electrification Corporation (REC)

Your investment in these bonds will be redeemable after five years. Simultaneously, you cannot sell them before the lapse of three years from the date of sale of the house property. You will have six months duration upon the sale to invest in these bonds. It is recommended to invest before the return of the filing date. As far as the limit is concerned, you can invest max to max INR 50 lakhs in a financial year in these bonds.

Tips to Monitor NRIs Property in India

May 10, 2018 Manoj Sodhani Comments 0 Comment

NRI’s problems related to property monitoring:

Do you own a property in India?

It’s a walkover if you live in India. You need not spend hundreds of dollars for visiting your own property. Neither would you worry about the encroachers. However, unscrupulous people tend to seize properties. But, if you make occasional rounds, it ensures that your fixed asset would be safe.

Now, see the property monitoring from the lens of an NRI.

Would he be able to make the rounds of his property now and then? Would he be ready to bear on overhead expenses in thousands of dollars once in a month? If he fails to take care of his property religiously, the day won’t be so far when any land-mafia would take over your asset.

Recently, a shocking incident of an NRI’s property has surfaced the Economic Times. It spotlighted the trauma of the one belonging to the Indian diaspora. A non-resident from Zambia purchased a house in the name of his mother. But, his absence for several years gave his siblings an opportunity to acquire that property. His younger brother constructed it without asking the owner. And, he was unable to take any action against.

Property Inheritance:

However, an expat with an Indian passport is not allowed to invest in any immovable property. But, a relative or friend gifts to it, he can take its ownership. Moreover, he doesn’t need to pay tax as a gifted property is exempt from it. The word ‘relative’ (who can gift the property) includes:

Spouse
Brother/Sister
Brother/ Sister of the spouse
A lineal descendant or ascendant
A lineal descendant or ascendant of the spouse

But here again, you have to take care of that immovable property by self. Otherwise, the aforesaid problems will take a sneak peek. And, you might lose it.

Benefits of Property in India for non-residents:

Loan against rental income:

The non-residents can apply for 5-year loan upfront against the rental income. Or, they can deposit the paper of the real-estate as a security with the bank. In return, the bank would provide them short-term funds in India. Apart from banks, the housing companies do play the same role. Therefore, you would have a golden opportunity to get a loan.

Repatriation up to $1 million:

If you use your property in India for generating rental income, you can repatriate that amount. But, that repatriation would be possible after three-year lock-in period. The lock-in period is the predetermined time.

If it’s generated from an inherited property, you can repatriate up to $1 million in a financial year. There is no lock-in period for this. You don’t need to pay tax. But, you have to provide the documents and certificates attested by the chartered accountant.

Tips to monitor NRI’s property in India:

Are you ready to fight with the encroachers and shady people in India?

Bear in your mind that it’s going to be an uphill battle if you sue from overseas. You can’t visit on every trial. What you can do is to take these steps:

Ask any relative or friend to take care of that property.
Engrave a nameplate.
Go for legal documentation, even if it’s inherited. You must transfer all documents on your name.
Pay taxes to the Municipal Corporation and other authorities. Pay through cheques.
Keep photocopies of those cheques and documents in a safe place.
Don’t empower your attorney with unlimited authority.
Specify which kind of authority you’ve provided to him. Be it for maintenance and protection of that property, mention it subtly.
Don’t provide the authority to sell that property. Neither should you provide the power to agree over selling that asset.

Let’s wrap up!

Being an NRI, you should keep an observer’s eye on your property on a daily basis. However, it’s impossible. But, you can do it with the help of your friends and relatives. Make them attorney, but while restricting their power. Keep all documents of that property, cheques of tax and their photocopies in a safe place.

Tax Benefits for NRIs Over Real Estate Investment in India

March 12, 2018 Manoj Sodhani Comments 0 Comment

The homesickness tends to attract non-residents in their native country. Their nostalgia compels them to plan for shifting here again after retirement. At that point, they often sweat out.

Reason?

Many factors are responsible for it. So far, there are a few massive obstacles that can trap you (if you’re the NRI) up. Let’s share a few vital points that are significant from your aspect if you’re planning to invest in the real estate in India.

I’ll begin with what FEMA states.

What FEMA says?

The Foreign Exchange Management Act (FEMA) is the licit regulation that states the rules & guidelines for the expats. The real estate investment of the NRIs comes within its index. This regulatory act is governed by the Reserve Bank of India (RBI). It’s basically drafted to pat the foreign investment in this sector.

This Act subtly reads that the PIOs/OCIs/NRIs own right to purchase a piece of land or any property here. This is permissible provided that the land or property must not be an agricultural land or a farm house. Moreover, they can invest in any commercial land.

However, if anyone is a blue blood, the property can be any immovable or movable one.

What about the loan availability for NRIs?

The expat with an Indian passport, mostly, have foreign currency. So, they intend to transact in that currency. But, the regulatory Act denies such kind of permission. Only Indian currency is valid for making this kind of deal. Also, the conduit must be an Indian bank, like PNB or SBI. They must have their account in any of these banks.

As far as the loan is concerned, you as the NRI/PIO/OCI can owe it if you get a green signal in paperwork. Many real-estate companies attract foreign clients to transact in the residential or commercial land/property. The investor must make sure that all your payments towards inward remittance should be through NRE/NRO account.

Moreover, they offer loan availability as well. So, if you’re on a shoestring, you can dream of a house of your own. To enjoy this loan facility, you should have at least 20% of the total value of the property. It means that you can get around 80% of the loan from any reliable source.

What if you’ll not be physically present to deal?

The physical unavailability can be answered through Power of Attorney (PoA). It defines that it’s ok if you can’t be present at the deal. You can go a round of discussion with your lawyer. Thereafter, it won’t be a big deal to empower the third party (like your lawyer or relative or builder or a trusted associate) with the PoA.

Drill in your head that it’s an extremely sensitive issue. You can lose your hard-earned money into the hands of any fraud. So, make sure that the chosen attorney would be reliable and trustworthy.

What are the tax benefits for the non-residents?

The Section 80C of the Income Tax Act, 1961 clearly defines that the foreign resident with Indian passport can claim for the tax deduction. It’s available upto 1 Lakh. But the Act has two provisions:

The property sold within 3 years of its purchase
The property sold after 3 years of its purchase

The first case would be termed as a short term capital gain. If you’ve earned any rental income in this case, it would be taxable. The second case would define as a long term capital gain. In this case, the expat can utilize his money by investing in another property.

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