Bought For Rs 64 Lakh In 2010, Hyderabad Flat Gives 0.5% Return: NRI's Costly Real Estate Investment Lesson

What seemed like a promising real estate bet in Hyderabad more than a decade ago has now turned into a cautionary tale for an NRI couple. Their 2010 property purchase led to only a 0.5% annualised return in US dollar terms over 15 years, far below what they could have earned through global equity investments.

The couple had bought a 3BHK flat in the Mantri Celestia complex in Hyderabad's Nanakramguda area, paying Rs 64 lakh in 2010, according to a Reddit post. Over nine years, they paid Rs 59.34 lakh to the builder through staggered EMIs and spent another Rs 5 lakh on woodwork and repairs. Though the investment came as a good option at the time, delays in possession and a tepid resale price ultimately led to disappointing outcomes. They only received possession in 2019 and sold the property in 2024 for Rs 90 lakh.

On the surface, the deal appeared to deliver returns. Post the deduction of realtor fees and capital gains tax, the couple received only Rs 84.9 lakh in hand. Between 2019 and 2024, they also earned Rs 7.2 lakh in net rental income after tax and maintenance costs, bringing the total gain in rupee terms to around Rs 28.9 lakh.

However, when adjusted for currency exchange and opportunity cost, the numbers painted a starkly different picture. Back in 2010, the rupee-dollar exchange rate hovered around Rs 45 per dollar. By 2024, it had weakened to around Rs 85 per dollar. The couple's initial investment, which translated to around $1,11,740 at the time, yielded only about $1,20,000 after 15 years, including both rent and sale proceeds.

The couple shared their experience on the subreddit 'rupeestories,' comparing their real estate investment to a hypothetical investment in the S&P 500 index fund. Had they parked the same amount in the US market, they estimated it would have grown to over $3,30,000 — a stark contrast to the $1,20,000 they actually ended up with. That’s an opportunity cost of more than $2,10,000 (around Rs 1.8 crore).

Beyond the disappointing numbers, the experience was fraught with other difficulties — property maintenance from abroad, delays, paperwork, dealing with tenants and chasing rent payments. Even rental returns were underwhelming, the post highlighted. Over five years, the property earned Rs 12 lakh in rent, which shrunk to Rs 7.2 lakh after taxes and maintenance. This amounted to a gross rental yield of just 2.25%, well below the 3.5-5% net yield experts often suggest NRIs should aim for.

Adding to their frustration was the underperformance of the location itself. Though Nanakramguda was once billed as the next major "IT corridor," it didn't live up to the hype. Liquidity, too, was a problem. The property wasn't easy to sell, delaying the exit and underscoring the challenges in offloading Indian real estate quickly when required.

• Reflecting on the journey, the NRI investor outlined key takeaways from their experience:

• "Currency risk is real: INR returns might look decent, but USD-adjusted gains are what matter for NRIs.

• Opportunity cost adds up: Passive US index funds can quietly outpace real estate over the long run.

• Cash flow > capital gains: Low rental yields and poor liquidity make it hard to justify holding.

• Don’t invest based on hype: Not every “IT corridor” turns into the next Hitech City.

• Run the full math: Before you buy in both INR and USD. Don’t just rely on appreciation hopes."

The real estate investment of the NRI couple highlights a growing realisation — real estate in India, while emotionally compelling, may not always be financially rewarding, especially for NRIs. Exchange rates, taxation, opportunity costs and illiquidity can all eat into gains.

As the NRI investor summarised, "This post isn't anti-property. It's pro-math."