Simplified and Clear: Can a Foreigner Buy Property in Nepal?

Myths About Real Estate in Nepal Debunked: The Real Truth

Simplified and Clear: Can a Foreigner Buy Property in Nepal?Especially when it comes to real estate in Nepal, there are a lot of myths. There are so many wrong advice and beliefs, and while some of them might have a little basis, others just don’t add up.

Today we look at some of the real estate myths in Nepal, and at the same time, tell the truth about them.


Real Estate Agents are Supposed to Take a lot of Money

This one is the one that bugs us the most. A lot of people complain that the real estate agent they worked with while buying a house or land took more money than needed.

To be honest, ‘agents’ demanding a lot of commissions is not an issue in itself.

The real problem is people not knowing the concept of registered real estate agents. In many countries around the world, taking a license is a must to become a real estate agent.

This is true in Nepal as well. However, the trend and the poor implementation of rules have put us in a position that we take help from anyone who calls themselves a representative. Most of the time, these people haven’t registered their business and don’t do taxes- so, they will ask for whatever amount that is in their mind.

So, you need to work only with registered property agents for whom reviews matter. They can sell your property faster, and if you are buying, they won’t increase the real estate price considerably just to keep more money with themselves.


Real Estate in Nepal is Easy Money with Very Little Risks

Being straightforward, real estate is ‘money,’ but it isn’t easy money. Having a house in Nepal doesn’t guarantee that you will become rich in some time.

You see, just like in any other investments, time, skills and foresight matter. Moreover, Nepal is a developing country, so the location is another factor.
With a lot of development projects going on, you never know when the government will demand your land. Well, this isn’t necessarily bad, as it’s our own country’s growth and there are repercussions, but it will still hurt your investment.

Additionally, even if you are not living in a house, you need to put money on maintenance. You need to spend more if you are willing to sell your home, as you would want it to always look its best.

Don’t forget natural disasters like earthquakes and floods.


Home Loans in Nepal Are Excellent/ Worst

In this case, if you ask our experience, there are two categories of Nepalis.

The first one thinks that home loans are the ultimate saviors that make buying or investing in property a piece of cake. On the other hand, some people think that home loans are just some schemes from banks and refrain from considering them.

You see, in most cases, home loans help people, but that comes with a cost. You need to pay EMIs. In Kathmandu, the maximum Loan to Value ratio is 40% of the real estate cost. It is 50% outside the city. Well, it is 50% and 60% for residential houses in Kathmandu and outside respectively.

This means a bank or a financial institution can only help you with about 50% of the total cost of the property. Again, the maximum mortgage you can apply for is up to NPR 15 million (1.5 crores).

On the other hand, if you think home loans are not good, you need to think again. Actually, they can be excellent options if you can pay for them.

Financial institutions don’t give loans to anyone. They know they are supposed to help with property, so there are a lot of considerations before they provide someone with the money they need. You can see one of our articles, How Do Home Loans Work in Nepal?


You Need to be Extremely Rich to Start Investing in Real Estate in Nepal

While you need money to start on the real estate business, you don’t need to be extremely rich. After all, it is about the knowledge, network, and an entrepreneurial mindset with the will to never give up.

First, you need to spend a lot of time studying the market. You would have to do this even if you had money and were capable of buying any house you want. After all, you can’t blindly purchase everything on your way even if you can.

You don’t necessarily need to become a homeowner- rather, you can take certifications as an agent or an appraiser and then start from there. On the other hand, getting a job in a real estate company can give you insights on the inside business from where you can build yourself.

Also, partnering with people initially to buy property can be a viable idea in case you don’t already have a lot in your pocket. Anyway, you should let your partners understand that it is an investment, and all of you have to take equal risks.

The thing we want to say is that even though real estate requires money, it isn’t the only factor. Most of the successful real estate traders start from the bottom- many of us haven’t been rich since the beginning of our lives.

myths about real estate


Another Myth about Real Estate Rentals in Nepal- The Owner is the King

One of the biggest problems regarding real estate in Nepal prevails especially in the sector of renting properties.

The owners think they have the right to make impractical rules and demands. On the other hand, renters think it is mandatory to comply with all of them. Also, in some cases, renters can make changes to the property not allowed by law.

Here are some laws. In Nepal, the renter and the tenant should make a written agreement if the rent is more than Rs.10,000. The tenant is liable for all the taxes – well, the renter may need to pay it, but that should be agreed beforehand. In most cases, if the renter has paid the taxes, they have the right to ask their tenant to deduct the rent prices. Utilities are per the agreement.

Also, the renter has to check the house for security. If they don’t do any insurance, they will be liable to pay for the renovation work which they caused. For example, fire damage.’

The renter should send 35 days prior notice to the tenant if they want to leave the house. Moreover, they can’t do illegal activities in their apartments- this includes no violence and no other activities that disturb their neighbors.

The thing is that the rental laws in Nepal are very much up to the point. The word that we use, “manpari” shouldn’t exist.

You can know more about the rental rules in Nepal in this link.


Well, we debunked some of the biggest myths about real estate in Nepal. You can contact us for more inquiries regarding it. Also, you can visit our listing for real estate buy and sell in Nepal.