Investing in India with repatriated monies

[isitasham 1]

This may seem an off-topic subject but is specific to India so I am taking the liberty of posting in this forum.

I am looking for opinions, ideas, and suggestions on the following invesment opportunities in India:

since the return on investment (real-estate, savings, CD's etc.)here in the US are far lower compared to what one could expect by investing in india, does it make sense to invest e.g. in real-estate in india with money earned/borrowed here in the US.

Here is a scenario:

I take a home equity loan for $200,000 at a nominal interest rate of 5%. Repatriate this money to india and purchase real-estate for say 90 lacs. I can expect to double my money in probably five years (i.e. 20% annual return on investment) for this real-estate. Taking off the 5% interest I end up with a net 15% annual return. I can't get similar return in the US.

So what are the risks or things that I may be missing by doing so? Any opinions or suggestions please.

[trinket 30]

The biggest risk I see is damage done to your property by outsider, if you don't have relatives living near by or someone who you trust isn't taking care of the property.

I am not just taking about the physical damage but also your tenants taking over your property over the time of years. So make sure you have foolproof lease agreements and all the other legal aspects are taken care of.

[isitasham 1]

The biggest risk I see is damage done to your property by outsider, if you don't have relatives living near by or someone who you trust isn't taking care of the property.

I am not just taking about the physical damage but also your tenants taking over your property over the time of years. So make sure you have foolproof lease agreements and all the other legal aspects are taken care of.

Hi Trinket,

Good point. That definitely is a risk...........from what I have heard though things are a little better than what they used to be in favor of the land lord and the key is how and to who you lease the property.

Thanks for the input.

[bobby_kvisa 7]

Taxes are very high in India - for many things consumer taxes are much higher than what you pay in the US.

Make sure you look into this to make sure its factored into your numbers.