The Emotional Pull of Owning Property in India

For many NRIs, buying a home back in India isn’t just a financial decision — it’s deeply emotional.

It feels like you’re anchoring your identity, securing your future, or staying connected to your roots. But when property becomes an investment decision, emotions can get expensive.

Let’s walk through the numbers — and the real cost of a typical NRI flat purchase.

Rental Income vs Reality

Suppose you buy a flat worth ₹1 crore.

In most Indian cities, gross rental yield is 2–3%. After maintenance, tax, and vacancy, your net yield drops to 1.5% or less. That means you’re earning just ₹1.5 lakh per year.

Many NRIs take comfort in that: “At least it’s giving me rent.”
But ask yourself — do you really need that ₹1.5L/year?

If not, you’re better off letting that ₹1 crore compound quietly instead of trickling back as rental crumbs.

What If You Invested Instead?

Let’s take the same ₹1 crore and invest it in a low-cost index fund — like Nifty 500 or S&P 500 — historically giving ~11% CAGR over the long term.

• In 20 years: ₹1 crore grows to ₹8 crore
• Even conservatively, after inflation and taxes: ₹6–6.5 crore net

Now compare that to your real estate return:

• Flat doubles to ₹2 crore
• Add 20 years of rent (~₹30 lakh)
• Total value: ₹2.3 crore at best

That’s a ₹4 crore opportunity cost.

“But Real Estate Always Appreciates…”

Not really.

Historical data shows Indian property has returned ~3.5–4% CAGR net over long periods, once you factor in:

• Stamp duty
• Brokerage fees
• Maintenance
• Liquidity risk
• Rental gaps
• Inflation

Meanwhile, equity has consistently outpaced it — without locking up your capital or requiring emotional babysitting.

Common Traps NRIs Fall Into

• Unclear property titles — risking legal trouble
• Skipping RERA verification — buying into unregistered projects
• Overpaying due to nostalgia — not market value
• Second homes that sit empty — draining capital, no ROI
• Buying too early — before retirement clarity

These aren’t just risks. They’re patterns — and they cost real money.

What You Should Do Instead

If you’re buying a house to live in — go ahead. But if it’s about “investment in India”, rethink your approach:

✅ Only buy if you have a defined use (retirement, return plan)
✅ Run numbers — not feelings
✅ Compare returns with equity, PPF, and global assets
✅ Always verify titles, approvals, and RERA status
✅ Work with legal + financial advisors who don’t sell products

Final Word

“Emotion is human. But investment should be math.”

Don’t fall for the illusion of safety.
Don’t tie up crores just to feel like you “own something in India.”

Because in the long run, that ₹1 crore flat could be the reason you don’t reach ₹8 crore.