‘I rent for ₹1.5 lakh/month, math of buying doesn’t work for me’, says Bombay Shaving Company's Shantanu Deshpande
Shantanu Deshpande shared his insights on the renting vs buying debate regarding houses. Deshpande's personal decision came up during a conversation with Hyderabad-based real estate entrepreneur Ajitesh Korupulu. The latter was a guest on Deshpande's YouTube channel for a podcast on investing money in real estate.
Korupulu raised the argument that paying loan EMIs instead of rent leads to asset creation over time. He pointed out that for working professionals, real estate serves as an asset, and suggested that redirecting rent towards EMIs could lead to asset accumulation. Explaining why a family would choose to buy instead of rent, Korupulu said, "Let's say you're paying a rent of ₹1 lakh rupees ...
and even if you pay this rent for 10 years, you're not creating any asset. Whereas, when you pay EMI, you're going to create an asset... when you want to retire or lose your job, nobody will come and throw you out of your house." But Deshpande countered this viewpoint.
He shared that he resides in a prime location in Gurgaon, paying a monthly rent exceeding ₹1.5 lakh, adding that the financial dynamics in the city didn't align with a buying strategy. Detailing rental expenses, the premium nature of his accommodation and its market value, Deshpande explained that purchasing the property would entail significant loan leverage, resulting in EMI payments far surpassing his current rental costs. Additionally, Deshpande expressed his preference for investing in the public market, citing better liquidity compared to real estate.
He noted that allocating funds towards public markets allowed for asset growth without the liquidity constraints associated with fixed assets like property. "But the math doesn't work for me... maybe
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