Indian real estate has long been perceived as a lucrative and emotionally fulfilling investment, especially among Non-Resident Indians (NRIs). However, a recent real-life experience of an NRI couple who invested in a Hyderabad apartment back in 2010 paints a cautionary picture. Despite holding the property for 15 years and eventually selling it at a higher nominal price, the couple realised an annualised return of just 0.5% in US dollar terms. Their story has since sparked widespread discussion online, offering key lessons for overseas Indians looking to invest in Indian real estate.
A 15-Year Investment with Meagre Gains
The Property and the Purchase
- Project: Mantri Celestia, Nanakramguda, Hyderabad
- Type: 3BHK Apartment
- Size: 1,198 sq. ft.
- Purchase Year: 2010
- Possession Year: 2019
- Sale Year: 2024
The NRI couple began investing in the project in 2010, paying the builder in instalments over 9 years. The total outlay, including woodwork and repairs, amounted to ₹64.34 lakh (approx. $111,740 based on the then exchange rate of ₹45/USD).
The Returns and Realisation
Despite eventually selling the property for ₹90 lakh in 2024, post deductions (brokerage + capital gains tax), they received ₹84.9 lakh (~$109,090). Additionally, they earned ₹12 lakh in rent during five years of ownership, which netted to ₹7.2 lakh ($11,200) after taxes and maintenance.
Final Tally:
- Total Invested: $111,740
- Total Returns (Sale + Rent): ~$120,000
- Net Gain: ~$8,260 over 15 years
- Annualised Return: 0.5% in USD terms
Summary Table
| Metric | Value |
|---|---|
| Property Type | 3BHK Apartment (Mantri Celestia) |
| Investment Duration | 15 years |
| Total Investment (USD) | $111,740 |
| Net Sale Proceeds (USD) | $109,090 |
| Net Rental Income (USD) | $11,200 |
| Total Return (USD) | ~$120,290 |
| Annualised Return | 0.5% |
Expert Insights: Opportunity Costs & Currency Depreciation
Suresh Sadagopan, Founder of Ladder7 Wealth Planners, emphasizes the importance of accounting for opportunity cost and rupee depreciation in real estate decisions:
“If the same money had been invested in an S&P 500 index fund, the value today would’ve been over $210,000,” noted the buyer, underlining the long-term underperformance of the property investment.
Sadagopan also stresses that real estate investments often ignore interest costs, staggered payments, and delays — all of which further compress returns. Moreover, currency depreciation (from ₹45/USD in 2010 to ₹85/USD in 2024) severely erodes real gains for NRIs upon repatriation.
Lessons for NRIs: Avoid FOMO and Be Realistic
The Reddit community and financial experts are unanimous in advising NRIs to proceed with caution:
- Avoid FOMO: Don’t rush into property purchases out of fear. Explore, compare, and understand local dynamics first.
- Try Renting First: One Redditor suggests renting for at least six months within the preferred locality to make an informed decision.
- Factor in All Costs: Maintenance, taxes, legal delays, brokerage fees, and currency movement significantly affect actual returns.
- Opportunity Cost Matters: Compare potential real estate gains with returns from global financial instruments like equity index funds.
FAQs
1. Why did the NRI couple get only 0.5% annualised return?
Due to delayed possession, currency depreciation, and various holding costs, their effective return after 15 years was marginal.
2. How did currency depreciation affect the investment?
The rupee weakened from ₹45 to ₹85 per USD during the investment period, reducing real returns when converted back to dollars.
3. Would investing in mutual funds or equity be better for NRIs?
Yes, historically, global equity markets like the S&P 500 have offered higher and more consistent returns over similar periods.
4. What are the common mistakes NRIs make when buying property in India?
Rushing due to FOMO, underestimating holding costs, and failing to account for project delays or exchange rate risks.
5. Should NRIs completely avoid Indian real estate?
Not necessarily, but they should ensure the returns exceed expected currency depreciation (~4–5% annually) and be fully informed about risks and costs.