Indian Union Cabinet has passed laws that allow foreign investors to invest in REIT, which is likely to invest in the renting office and retail sector. Earlier, they could only invest in commercial property under construction in India. But, in India, REIT is still not allowed to invest in residential properties in India. Even now, the corporation does not rent residential properties in India, it has not changed.
In other countries, at least 80% of REITs should be invested in residential assets, why do large corporations and foreign investors not invest in residential properties in India? How will the tenants, the investors, and the company benefit from renting or organization of foreign investment?
1. Rent contracts are often not legally valid or are professionally controlled. It often leads to weak property rights for tenants and landlords. This fare will also reduce the cost of finding property, along with the renovation and the conglomeration of foreign investment, there will be more professional rental contracts.
2. Hire contract will solve many other problems. Tenants often find it expensive to get to a new home when the contract ends. Residents can live against the wishes of the landlord. Owners feel that when they rent for legal lovers or senior citizens, they are at risk of losing their rented property in Gurgaon. If such cases are resolved in the courts, then it may take decades.
3. Even if the management of firms is better in developed countries, as per the research and studies of firms in 17 countries, Management practices of multinational companies are everywhere world-class standards, with foreign investment companies, who own residential rented property in Gurgaon, will ensure that the utilities are working properly. At present, landlords do not work well in dealing with such cases. Landlords will also be more accountable to the tenants. Management of houses standards which can be rented will increase to the global level.
4. More international risks have to be shared. People have a strong priority to invest in domestic assets. It is particularly the case for residential rented property in Delhi as capital needs to move into residential projects where they are more valuable. Apart from this, when a foreign investor invests in residential property in India and when Indian investors invest in residential rental property abroad, then there is a fair share of risk.
When people directly own residential rented property in Delhi, it will be more difficult to avoid the preference of investing in home property. Therefore, to invest in residential property abroad, professional or multinational companies must raise their capital by issuing securities to investments in India and elsewhere, if it is permitted to invest in REITs in residential assets.
According to industry estimates, developers are running slowly in the execution of real estate projects. People who are renting, because they can save some money and not get the benefit of a home loan on high-interest rate chakras, there is bad news for Tide. As a result, the supply of residential apartments has declined in most major markets. Therefore, new emerging residential areas are still not able to meet the huge housing demand.