NRI · Ownership · The Propah POV
How do you manage a property in India from another country?
The risk you are managing is not rent default. It is an occupant you cannot remove and a property you cannot see. Both are cheap to prevent and expensive to fix. And on an asset netting around 2% after tax, a management fee of 8–10% of rent is a real decision rather than an administrative one.
What actually goes wrong
Rent arriving late is an irritation. These are the failures that cost real money, and they share a feature: they are all invisible from abroad until they are advanced.
- An occupant who will not leave. Eviction in India is slow, and it is slower when the landlord is not in the country and the paperwork is thin.
- An empty property occupied by someone else. The family house nobody lives in is the most exposed asset an NRI owns.
- Deterioration you never see. A leak becomes structural damage over two years of nobody looking.
- Compliance drift. Property tax unpaid, Khata not updated, association dues accumulating — all of which surface at diligence when you try to sell, years later.
- A tenant who does not deduct TDS, leaving you with an Indian tax position you did not know you had.
Distance does not create these problems. It delays your discovery of them, which is what makes them expensive.
The tenancy law question, and why Bengaluru needs care
The Model Tenancy Act modernised a great deal — but it is a model law for states to adopt, and adoption is uneven.
| Provision | Under the Model Tenancy Act |
|---|---|
| Security deposit | Capped at 2 months’ rent residential, 6 months commercial |
| Rent increases | Once a year, with at least 90 days’ written notice |
| Registration | With the Rent Authority within 60 days of signing; penalties for failure |
| Tenant overstay | Compensation at double rent for two months, then four times |
| Disputes | Rent authority, rent court and rent tribunal — a specialised route |
Karnataka is reported as having only partially adopted it. Assam, Tamil Nadu, Andhra Pradesh and Uttar Pradesh are described as full adopters; Karnataka and Maharashtra partial. So a Bengaluru landlord cannot assume the overstay penalty or the tribunal route is available. Ask your advocate what actually applies to your tenancy before relying on any of it — this is precisely the kind of thing a brochure will tell you is settled when it is not.
The 11-month agreement, and the trade you are making
India’s standard convention is an eleven-month tenancy, because agreements of twelve months or more attract registration. Almost everyone uses it, and it is not wrong — but understand what you are trading.
- You save registration cost and effort, and you retain flexibility to reset terms annually.
- You give up the evidentiary weight of a registered instrument. If you ever need to prove the terms against a determined occupant, a registered agreement is a materially stronger document.
- For a long-term or high-value letting, register it anyway. The cost is small relative to one disputed month, let alone one disputed year.
- E-stamping is available in most states and Aadhaar-based e-signing is legally valid, so executing properly from abroad is no longer the obstacle it once was.
Verify the tenant properly, not socially
The commonest failure is a tenant taken on a personal reference. A verbal reference protects you from nothing. Proper remote verification is now straightforward:
- Aadhaar verification against UIDAI records, by OTP.
- PAN validation, which links the tenant to a financial identity.
- Police verification or intimation — mandatory in many cities and filed online in several states. Do it even where it is not mandatory; it establishes a record.
- Employment or business confirmation, and previous landlord contact.
The tax layer a remote landlord cannot ignore
A tenant paying rent to a non-resident landlord must deduct tax at source on the gross rent — commonly cited at 31.2%, being 30% plus cess — not on your net income. They must obtain a TAN, deposit monthly, file quarterly and issue you a certificate.
Two practical consequences. Individual tenants frequently do not know this, and some walk when told; and where it is deducted correctly, far more is withheld than you owe, recoverable only when you file. A lower-deduction certificate under section 197 corrects it, and like every certificate in this area it must be in place before the rent starts flowing.
Rent accumulates in your NRO account and leaves India under the USD 1 million annual limit, with Forms 15CA and 15CB. The full income arithmetic is here.
What management actually costs, and whether to pay it
Traditional full-service managers charge around 8–10% of rent. Software-led services charge a flat monthly fee independent of rent, which changes the arithmetic on a higher-value property.
That is a real cost on an asset already yielding thinly, and it deserves an honest answer rather than a reflex. The case for paying it is not convenience. It is that the failures listed at the top of this article are the ones that destroy value, and every one of them is a detection problem. What you are buying is somebody looking.
The case against is that a reliable family member on the ground, with a properly drafted power of attorney and a clear annual routine, can do most of it — provided they will actually do it, and provided you have not quietly made a relative into an unpaid employee. Be honest about which of those you have.
The minimum setup we would insist on
- A named person in India who can act, with a power of attorney scoped to management rather than to sale.
- A written agreement, e-stamped, with the deposit and notice terms explicit — registered where the letting is long or valuable.
- Verified tenant identity, and a police intimation on file.
- A physical inspection at least once a year, with dated photographs. This is the single highest-value habit for a remote owner, and it is also what preserves your five-year defect claim against a developer.
- Standing instructions for property tax and association dues, so nothing drifts.
- The section 197 certificate before the first rent is paid.
- Never leave a property empty and unattended for years. If nobody is living in it and nobody is watching it, let it or sell it — those are the two safe states.
What this does not cover
- Tenancy law is a state subject and adoption of the Model Tenancy Act is uneven. Provisions described are those of the model law, not necessarily the law in your state.
- Eviction procedure, grounds and timelines vary by state and by the nature of the tenancy, and are not addressed here.
- Management fees, verification services and their scope vary widely; figures are published market ranges.
- Section numbering under the Income Tax Act 2025 is in transition; references are given as commonly used.
- This is general information, not legal or tax advice. Take advice on your tenancy before a dispute rather than after one.
How can an NRI manage a rental property in India remotely?
Through a named person in India with a power of attorney scoped to management, a properly executed written tenancy, verified tenant identity, and at least one physical inspection a year with dated photographs. Professional managers charge around 8–10% of rent for the full service; software-led platforms charge a flat monthly fee independent of rent. What you are actually buying with either is somebody looking — the failures that destroy value are all detection problems.
What does property management cost in India?
Traditional full-service management runs roughly 8–10% of rent. On a property netting around 1.98% after costs and tax, an 8% fee takes it to about 1.73% — roughly an eighth of your income. That is a real decision on a thin-yielding asset, not an administrative one. Flat-fee software services change the arithmetic on higher-value properties, since the cost stops scaling with the rent.
Why are Indian rent agreements for 11 months?
Because agreements of twelve months or more attract registration, and eleven months avoids it. The convention is near-universal and not wrong, but understand the trade: you save registration cost and keep annual flexibility, and you give up the evidentiary weight of a registered instrument if you ever need to prove terms against a determined occupant. For a long or high-value letting, register it anyway — the cost is small against one disputed month.
Does the Model Tenancy Act apply in Karnataka?
Only partially, on published accounts. The Model Tenancy Act is a model law for states to adopt and adoption is uneven — Assam, Tamil Nadu, Andhra Pradesh and Uttar Pradesh are described as full adopters, with Karnataka and Maharashtra partial. So a Bengaluru landlord cannot assume the overstay compensation, the deposit cap or the rent tribunal route is available. Confirm with your advocate what actually governs your tenancy before relying on any of it.
What is the security deposit limit under the Model Tenancy Act?
Two months' rent for residential property and six months for commercial, where the Act has been adopted. It also allows rent increases only once a year with at least 90 days' written notice, requires registration with the Rent Authority within 60 days of signing, and provides compensation for tenant overstay at double the rent for two months and four times thereafter. Whether these apply to you depends on your state's adoption.
Does my tenant have to deduct TDS if I am an NRI?
Yes — commonly cited at 31.2%, being 30% plus cess, applied to the gross rent rather than your net income. The tenant must obtain a TAN, deposit monthly, file quarterly returns and issue you a certificate. Individual tenants frequently do not know this and some withdraw when told, so raise it early. A lower-deduction certificate under section 197 brings the withholding closer to your actual liability, and must be obtained before the rent starts.
How do I verify a tenant from abroad?
Aadhaar verification against UIDAI records by OTP, PAN validation to link a financial identity, police verification or intimation — mandatory in many cities and filed online in several states — plus employment confirmation and contact with the previous landlord. Do the police intimation even where it is not mandatory, because it establishes a record. A personal reference from someone you trust protects you from nothing if the tenant later defaults or refuses to leave.
Is it risky to leave a property in India empty?
It is the most exposed position an NRI owner can be in. An empty, unwatched property invites unauthorised occupation, deterioration goes undetected until it is structural, and compliance drifts — unpaid property tax, an un-updated Khata, accumulating association dues — all of which surface at diligence when you eventually try to sell. If nobody lives in it and nobody is watching it, the two safe states are let or sold.
Model Tenancy Act provisions, state adoption status, management fee ranges, tenant verification practice and the NRI rent withholding position checked across published guidance in September 2026. Tenancy is a state subject and the Model Tenancy Act is a model law; provisions described are those of the model law and may not be in force where your property is. Karnataka is reported as a partial adopter — confirm what governs your tenancy locally. Fee figures are published market ranges. Section numbering under the Income Tax Act 2025 is in transition. This is general information, not legal or tax advice.
Still deciding, or want this applied to your own situation?
Tell us where you are and we will come back to you. The first conversation is free, and we will tell you plainly if we are not the right people for it.
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One inspection a year, with dated photographs.
It is the cheapest habit available to a remote owner, and it protects the defect claim, the condition and the tenancy at the same time.
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