Motivations for investing in indian real estate for NRIs

Here are some motivations for investing in Indian real estate for NRIs:

• Returning to India in the future: Many NRI eventually want to return to India, so investment in property is the first step towards establishing an additional root in the place of your choice.  
  
• Investment opportunity: Indian real estate market is one of the hottest investment opportunities in the world. The rate of home ownership is relatively low India (with a significant upside potential), and combined with economic growth potential we are looking forward to a golden age of real estate growth in India.
  
• Diversification: A typical NRI has eggs in many investment baskets to minimize the risk exposure of the financial investment. Given the downside risk facing the world economy (thus the prospect of a dismal return from other investments) it is a good idea to allocate a portion to Indian real estate market. This is more appropriate as we continue to see a decoupling of economic growth between the developed and emerging markets.  
  
• Renting benefit: Given the robust growth in the rental market in India, property investment in India has the benefit of monthly income that potentially grows over time. A healthy rental market also indicates a robust housing market, thus when you decide to sell your house you will enjoy capital gains on your investment. So buying a property to rent is like investing in fixed income securities with rising coupon and a final principal payment that is more than the face value.