Apr 30, 2024 04:26 PM IST
Bombay Shaving Company founder Shantanu Deshpande talked about not owing a house and said, “The math doesn’t work for me that way.”
Bombay Shaving Company founder Shantanu Deshpande said that he does not own the house and shared the reason for his decision in a recent podcast. In a conversation with Hyderabad-based real estate entrepreneur Ajitesh Korupulu, Shantanu Deshpande said that he lived in Gurugram where he paid a monthly rent of over ₹1.5 lakh.
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Ajitesh Korupulu said, “As an entrepreneur what’s happening is your asset is being built by a company. For somebody who’s a working professional, the real estate becomes the asset. Let’s say you’re paying a rent of maybe you know ₹1 lakh. You pay another ₹50,000-60,000 more you get a home. Even if you pay this rent for 10 years, you’re not creating any asset. Whereas you pay the EMI, you’re going to create an asset.”
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To this, Shantanu Deshpande responded, “The math doesn’t work for me that way. For example, and maybe this is a very Gurgaon thing, so maybe Hyderabad is different. Gurgaon, I’m paying ₹1.5 lakh in rent including maintenance [Rs] 1.6,1.65 [lakh] on Golf Course, premium place etc. The apartment I live in is roughly worth ₹7.5-8 crore. If I were to buy that apartment and I have to leverage let’s say 70% of it, ₹6 crore loan would be ₹6-7 lakh per month of EMI, which is like four times my rental cost. So, I’m living in a house which is like at 1/4th the EMI cost. So it makes no sense to buy.”
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He explained, “I would rather take that six lakh if I have it, if I’m earning it, I might as well put it into public markets and kind of build asset there as opposed to building a fixed asset where liquidity is very difficult. That’s the way I think about it unless I want to live there with my children and my parents are there and it’s a nice five bedroom, etc. and then you’re like okay fine now this is not an asset building activity, it is a cost.”
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