For many NRIs, buying property in India feels like a natural step—financially prudent, emotionally satisfying, and culturally rooted. But when the numbers are finally crunched, the results can often be sobering. One NRI couple’s experience with a Hyderabad flat they bought in 2010 offers a clear example of how real estate investments, especially from abroad, can underdeliver over time. Despite making what looked like a smart move back then, the couple now admits it cost them far more in missed opportunities, currency losses, and peace of mind.
In 2010, an overseas Indian couple invested Rs 64 lakh in a three-bedroom apartment located in Nanakramguda, Hyderabad. Their strategy involved placing funds in a rapidly developing urban center with expectations of capital growth along with earning rent. By the year 2025, they had sold this property for Rs 90 lakh. However, upon considering their overall financial situation—particularly measured against the value of the US dollar—they felt let down by the returns. This narrative found its way onto the subreddit called rupeestories.
An Apparent Lucrative Departure on Paper
The couple bought an apartment in the Mantri Celestia development and made payments totaling Rs 59.34 lakh to the developer across nine years via staggered EMIs. They also invested another Rs 5 lakh in carpentry work and renovations. The possession of the property was postponed till 2019, but eventually, they sold the flat in 2024 for Rs 90 lakh.Once the realtor fees and capital gains tax had been deducted, they ended up with Rs 84.9 lakh in their possession. This seemed like a profit of approximately Rs 21 lakh on paper. Including an after-tax net rental income of Rs 7.2 lakh for the period between 2019 and 2024, the total gain amounted to around Rs 28.9 lakh in Indian Rupees.
The Mathematics of Dollars Reveals a Separate Tale
However, when converted into dollars, the situation looked bleak. The decline of the rupee value—from approximately ₹45 per US$ in 2010 to nearly ₹85 per US$ in 2024—caused their overall earnings to drop significantly. Initially, their investment of ₹64.34 lakh equated to around $111,740 in U.S. currency. By the end of 15 years, including rental income and from selling the property, they ended up with just about $120,000. This means their net gain amounted to roughly $8,500 over this period, translating to an average yearly return rate of merely 0.5% in U.S. dollars.If the same amount had been consistently invested in an S&P 500 index fund such as SPY during the same timeframe, the couple figured they would have amassed more than $330,000. In contrast, they only managed to accumulate $120,000—resulting in an opportunity loss of over $210,000 (approximately Rs 1.8 crore). Their remorse was not solely due to the missing funds but also because of the wasted time and emotional effort spent managing the apartment, interacting with renters, collecting rents, addressing maintenance issues, and tackling tax and documentation challenges from another country.
Low Rent Return Rates and Issues with Asset Fluidity
Over five years, the flat earned Rs 12 lakh in rent, which after taxes and maintenance, dropped to Rs 7.2 lakh. That translated to a gross rental yield of around 2.25%, far below the 3.5%–5% net yield many experts believe NRIs should target to make real estate in India worthwhile.Additionally, the apartment failed to appreciate as anticipated. Even though it was situated in the highly touted "IT corridor," Nanakramguda did not evolve into the new Hitec City as forecasted. Furthermore, liquidity posed a problem; the property did not sell swiftly, underscoring the challenge of disposing of Indian real estate when urgent funding is needed.
Main Insights From an Expensive Learning Experience
Contemplating the whole experience, the non-resident Indian investor shared some valuable insights gained through trials and errors:
- Currency risk greatly affects Non-Resident Indian (NRI) investments. What seems like a good return in Indian Rupees might result in minimal gains when converted to US Dollars.
- The concept of opportunity cost is frequently ignored. Over time, U.S. index funds may silently surpass the returns from Indian real estate investments.
- Liquidity and returns are more crucial than speculative capital appreciation.
- Purchasing something solely due to popularity instead of solid foundations might result in disappointing results.
- It's essential to perform detailed calculations adjusted for USD when purchasing property in India.
Gurgaon Manager's Warning
This narrative isn't uncommon. Recently, a manager from Gurgaon recounted a comparable incident on social media. He mentioned someone who purchased a 3BHK flat in a second-tier city for Rs 70 lakhs back in 2022. After two years, this individual sold the property for only Rs 75 lakhs. Upon factoring in taxes and transaction fees, the overall profit turned out to be nearly insignificant.Actually, as highlighted by the manager, a straightforward fixed deposit in a bank for the same duration would have provided superior yields—free from the worries of managing property maintenance, handling paperwork, or dealing with market fluctuations.
The tale of flats in Hyderabad is just one example among numerous stories coming out of Non-Resident Indians (NRIs) and local investors. These narratives highlight a prevalent issue: although Indian property can be emotionally attractive and was previously considered a "secure" option, it does not necessarily provide substantial profits—particularly when accounting for factors like exchange rate fluctuations, tax implications, and potential earnings from alternate investments.
Be it in major metropolitan cities or smaller townships, real estate investments require more rigorous examination nowadays. To quote an honest NRI investor, "This isn't about being against property; it's about being in favor of math."