Property ownership, and investment in real estate in general, is a cornerstone of the traditional asset portfolio of NRI and Indian investors in general.  In recent years, as the Indian property market has slowed down considerably, and in some parts of the country started to decline, Indians are increasingly looking overseas to invest.

Challenges of Owning Real Estate Overseas

However, investing in real estate overseas brings it’s own challenges and difficulties.  Investors need to educate themselves in the different tax and legal systems, and the different process involved in purchasing and managing their real estate investment.

Property maintenance, managing the property from overseas, potential language barriers, depending on the location purchased, all add to what can be a burdensome endeavour for some Indian investors.

How to Invest in Property Without Buying a House

For Indian real estate investors who wish to have part of their overall investment portfolio invested in real estate, and in particular, overseas real estate, without having the burdens and challenges outlined above, can now invest in specialist real estate loan note investments.

Loan Notes are effectively ‘IOU’s, which are secured against the property and/or land which is being developed.  Loan notes are usually for a predefined length of time, anywhere from 18 months to 5 years, and pay a fixed rate of return, which is usually between 8% and 12% per annum. Depending on the individual investment, the investment may pay interest every 6 or 12 months, which enables investors to receive a steady stream of income, or the interest may be rolled up, and paid out at the maturity of the investment. Some Loan Note investments may also offer investors the opportunity to sell their investment prior to the maturity of the note.

Student Property Investments

Alternatively, Indian investors can invest in student property accommodation, a rapidly growing segment of the UK real estate sector. How this type of investment works, is that the investor will purchase an individual unit in a purpose built student accomodation development. This unit is then leased back to an experienced management company, which then oversees the maintenance and management of your unit.

This fully managed approach is perfect for overseas investors who do not want the hassle of hands on management of their investment, but would prefer to own  the physical property, ie by owning the title deeds to their unit. In addition, student accomodation investments frequently offer guaranteed rental returns of up to 10% for a fixed period of time, ideal for an investor seeking a steady and secure rental income.