Is buying a property more sustainable than renting? What are the costs to keep in mind while opting for homeownership? How much of a loan should you be taking in terms of an #EMI?
In this episode of Big Decisions with Germinate Investor Services' Santosh Joseph, we delve deep into the age-old question of whether you should buy a house or live on rent.
In this episode of Big Decisions with Germinate Investor Services' Santosh Joseph, we delve deep into the age-old question of whether you should buy a house or live on rent.
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TVTranscript
00:00 (dramatic music)
00:02 Think back to when you learned to draw.
00:08 What was the first thing that you remember drawing?
00:11 Chances are that it included hills,
00:13 maybe the sun, a river,
00:16 but what was the other thing
00:17 that was always part of that picture?
00:20 It was a house,
00:21 and it is so much more than just an asset.
00:25 It will probably be the largest purchase
00:27 that you will ever make.
00:29 And among all of the major financial decisions
00:32 that you make,
00:33 when to buy a house
00:34 is probably going to be ranking at the top of that list.
00:38 This is Big Decisions on NDTV Profit,
00:41 and I'm Alex Mathew.
00:42 Every week, we bring you conversations
00:44 that help you make your most important financial decisions
00:47 with confidence.
00:49 On today's episode,
00:50 I'm going to wade into a debate
00:51 that's been raging for longer than I've been alive,
00:54 at the very least.
00:55 Should you buy a house,
00:57 or should you live on rent?
00:59 And as always,
01:00 I'm curious about what you think.
01:02 So, we ran a poll,
01:04 and here's what we found.
01:06 - Everyone has their idea of home sweet home,
01:09 whether it's the freedom of renting
01:11 or the stability of home ownership.
01:13 The concept of finding the perfect place to call home
01:17 varies from person to person.
01:19 Now, the younger generation might raise their eyebrows
01:22 and say, "Buying a house in this economy?"
01:26 The slightly older generation
01:28 has the whole concept of apna ghar to internalized.
01:33 So we asked you on our social media platforms,
01:36 and let's just say,
01:37 the internet is as divided as it was probably 20 years ago.
01:41 With a 50/50 split in the results,
01:44 it really brings forward the point
01:45 that whether you're team renting or team buying,
01:48 making a decision between the two
01:51 is now more complex than ever.
01:53 - Now, at the onset,
01:56 I'd like to say that there is no right answer.
01:58 It's not just black and white,
02:00 there's a lot of gray.
02:02 And to talk about the entire spectrum,
02:04 I'm joined by Santosh Joseph,
02:07 the founder of Germinate Investor Services.
02:09 Santosh, thanks so much for joining me.
02:11 - Yeah, pleasure, Alex.
02:12 And you're talking about the drawing.
02:14 I still draw a home to begin with.
02:16 It's the easiest thing I can put together on a piece of paper.
02:18 - I was asking my producer,
02:20 and she said she drew an apple,
02:21 but then I think she remembers much more than I do.
02:24 They say that women remember more than men do.
02:28 - Yeah, I think that's definitely true,
02:30 but then when it comes to drawing,
02:32 you always go for the easy shapes,
02:33 and home is an easy shape.
02:34 Don't forget, you can always get it right.
02:36 - I certainly think so.
02:39 But okay, let's get into this conversation.
02:42 It's not an easy conversation to have,
02:43 which is why I put the caveat, Santosh, at the start,
02:46 which is that we're not saying
02:49 there is one right answer here.
02:51 There cannot be a right answer.
02:53 - See, you're talking to humans, right?
02:55 And when you talk to a machine,
02:56 today in the age of chat, GPT, and AI,
02:58 it's very easy to come with a binary outcome.
03:01 But when you look at humans
03:02 and what they're brought up with
03:04 and the decisions that they have to make,
03:07 home is not an easy answer to say whether it's good or bad.
03:11 - I like that you said home and not house.
03:13 - Yes, it is, because it's a house till you buy it.
03:15 The minute you buy it, it becomes a home,
03:16 because now there's ownership, there's belonging.
03:19 And believe me, there's a whole lot of emotion
03:21 that makes a house into a home.
03:24 - So, okay, so let's talk about,
03:26 we will talk about those emotions,
03:28 but then we have to strip out those emotions as well.
03:32 And you talk about both.
03:35 So at the start, let me do the tough thing
03:38 and strip out the emotion
03:40 and talk about the physical asset
03:42 that is a residential property.
03:44 And we're sticking to residential here.
03:46 We're not talking about commercial real estate.
03:49 What are the cases for owning of property?
03:53 - See, let's just go back in time
03:56 and see how typically wealth was made in the families.
04:01 Now, we had traditional assets
04:02 and real estate being one of the most
04:05 dominant traditional asset,
04:07 because of which I think many of us,
04:09 a generation of people like you and me
04:11 have benefited from our parents having their own home
04:13 and some of them being a little more prudent,
04:15 had more than one home.
04:17 And they were able to fund so many of key lifestyle events
04:20 by selling off the extra piece of real estate they had.
04:23 So it became a kind of forced savings,
04:26 which was also real estate,
04:28 which was also a home that they had a belonging to.
04:31 Now, the interesting part over here is that
04:34 people did not know there was asset formation
04:37 when they were buying a home.
04:38 - They didn't think about it that way.
04:39 - No, they didn't.
04:40 All they were looking at was store of value.
04:44 And at some level, not being impulsive with their money.
04:48 Remember, they did this even when the availability of loans
04:51 were not so easy as it is today.
04:54 - Okay, but a counterpoint to that is that
04:57 at the time that you're talking about,
04:58 which is my parents' generation, most certainly,
05:01 at that time, the financialization of assets
05:06 was not as significant as it is right now.
05:08 The availability of avenues to invest
05:11 was not as significant.
05:12 So it was either fixed deposit,
05:15 not even that in many cases,
05:17 or buying a house, or in fact, buying gold, jewelry.
05:21 So you were limited in your options.
05:23 Perhaps that also has to factor.
05:24 - Absolutely.
05:25 In fact, because of the limited options available,
05:29 depending on the quantum of money that you had
05:31 or the leverage that you were able to take,
05:34 only then asset formation is happening.
05:36 For example, money came into a bank account
05:38 to make an RRT or FT was a natural choice.
05:41 From there, you chose an occasion in the family
05:44 or a festivity to go and buy gold.
05:47 Real estate was an outlier choice even back then.
05:50 - Was it more affordable?
05:52 - Even though it was affordable,
05:54 you had to make a choice.
05:55 FD was easy, gold was relatively that much more easy
05:58 to buy a few grams of gold and jewelry you could wear it.
06:01 But real estate, you had to go search, find,
06:04 and make a decision.
06:06 And even if you get a loan, you had to put a down payment.
06:08 So don't forget that.
06:09 - So, okay, so let's talk about the cases first
06:13 to buy a house and then the cases against buying a house.
06:16 And then we'll talk about the emotional aspect of it.
06:18 And finally, what we'll do is we'll round it off
06:21 to say that if you are indeed going out to buy a house
06:24 and you will likely have to take a loan to do this,
06:28 what are the thumb rules to follow?
06:30 So the first aspect, which is when you are making a case
06:35 to buy a house, what are those right now?
06:37 Without the emotions.
06:39 - See, I think without the emotional part,
06:41 it's very important to figure out the age of the person
06:45 and the family background.
06:47 Why am I saying this is because otherwise we'll go on
06:49 and beating around the bush saying that
06:51 whether we should buy or not by year.
06:52 The minute you customize the need to the person,
06:56 the age and the family requirement, you're very clear.
06:59 You buy a home because you want to house yourself in, right?
07:03 And you want stability for your family, right?
07:05 And you also want to ensure that you'll buy an asset today
07:08 then buy it later when it's expensive.
07:11 And last, which is kind of a lesser known fact,
07:14 it's a forced saving for people
07:16 because they're creating an asset first,
07:18 paying for it during the course of the time.
07:21 - Why are you saying that though?
07:22 In your experience, and the reason I'm asking this is
07:25 that a lot of people are now aware of the fact
07:28 that they have to save,
07:30 they're setting aside a portion of their income.
07:32 Are you saying that not enough people save?
07:35 - Well, people do save,
07:36 but I think thanks to so much of information
07:39 around saving and how much to save,
07:41 there's a little bit of confusion for people.
07:43 For example, if someone is earning,
07:44 let's say 75,000 to a lakh,
07:46 they will be doing a 5,000 rupee SIP
07:48 and thinking, "Oh, I'm saving."
07:50 But when you take a home loan,
07:52 60,000 will go into a home loan.
07:54 Can you just look at the quantum straight away
07:56 on the amount of money that you're putting aside
07:59 makes you a winner.
08:00 If you are doing the same thing with your SIP,
08:03 then you know you didn't have to even talk
08:04 about these debates.
08:06 On the other hand,
08:07 when you look at taking that home loan
08:11 and buying the house,
08:12 you are actually front-ending that
08:14 and you're getting to enjoy the benefit right away.
08:17 Which is even if you buy a 75,000 to a one crore rupee home,
08:21 you're paying a small down payment,
08:23 enjoying the house straight forward.
08:24 - Where are these 75,000, one crore homes?
08:27 You're sitting in Mumbai, Santosh,
08:29 and I must tell you that there are no such homes available.
08:31 - Well, minus the top four, five cities in India,
08:34 I think still two or three bedroom would be available.
08:38 And you're right, even in Bangalore today,
08:41 that one crore or 1.25 crore tickets are a pass.
08:45 They're no longer available.
08:46 You'll have to go on the outskirts of the city.
08:48 But then people don't want to go on the outskirts city
08:50 because then they're cut away from the buzz of the city.
08:53 So you're right.
08:54 - Okay, so you've made some strong cases
08:56 and ownership in terms of usage is what I'm getting, right?
08:59 You buy a house and you live in it.
09:01 You're not talking about buying it as an investment
09:03 because we've proven that in several cases,
09:05 and particularly, we were talking just before
09:08 we started this conversation about what an individual
09:11 thinks when you say, "Hey, do you want to buy a house?"
09:13 The idea is, the first thing you think of is apartment,
09:17 right, you're not really thinking of a plot of land
09:19 and you're not thinking of a house on that plot of land.
09:22 So we're still talking about apartments.
09:25 It's not really a good investment.
09:27 Is that proven?
09:28 - Absolutely true.
09:29 See, the urban person who's looking at this kind
09:32 of an investment, if you do a dipstick
09:34 and just check anybody, what do you mean by a house,
09:37 they will say, or what picture comes to their mind
09:39 is a cozy two bedroom, three bedroom apartment
09:41 for the nuclear family, right?
09:43 Now, when you are looking at plot, building,
09:47 all these may be financially way better
09:49 and it makes sense more arithmetically,
09:51 but people have not even thought about it.
09:52 There's no bandwidth to buy, to build,
09:55 to take care, and to maintain.
09:57 So therefore, the easy solution for urban living
10:00 is to buy a good flat where there's good society,
10:02 good maintenance, and there's enough amenities
10:06 for you to run around, maybe the club,
10:08 maybe to take care of the kids
10:10 and even senior parents living at home.
10:12 So there are benefits.
10:13 So therefore, the way to look at it is
10:15 if it works for you, then it makes sense.
10:17 - Sure, and mostly if you're using all of those services
10:20 yourself and not renting it out.
10:22 I think a lot of people don't factor the opportunity cost.
10:25 They say, hey, you know what, I'm spending so much on rent
10:28 and that is a sunk cost, it's gone,
10:30 and I'm paying an EMI, but I'm creating an asset,
10:33 I'm using it, I'm living in it.
10:35 Even if it's 20 plus years, why not buy a house?
10:40 - So let's look at it both ways.
10:41 If you're consuming and you're not paying rent,
10:44 but paying the EMI, it works beautifully,
10:46 and we know that, right?
10:47 If you're not consuming and you thought that,
10:49 you know, I cannot be a disciplined saver,
10:52 so maybe a home will force me to be a disciplined saver.
10:55 - And the rent that you earn on that is paying your EMI.
10:57 That's the argument.
10:58 But you see, the EMI that you pay
11:00 and the rent that you get is never equal.
11:01 And I think we all know it.
11:02 And if it was that easy,
11:03 then all of us would be owning multiple apartments.
11:05 It's not that easy.
11:07 So at some level, let's take a blanket number
11:09 that about 50% of the EMI that you pay will be the rent.
11:12 Now don't forget there are taxes even there,
11:15 and you'll have to take care of the maintenance cost
11:17 and the running cost, as well as even the income
11:21 that you earn as rent will also be taxed.
11:22 So keep that in mind.
11:24 Now the second part is that when you got this home,
11:26 you're also assuming renting is easy.
11:28 - It's not.
11:29 - Right, we all know the urban challenges of,
11:31 if you want a house for rent, it's challenging,
11:34 and therefore you buy a house.
11:35 Now if you have a home, finding a tenant is difficult,
11:38 and also to find someone suitable to your needs who,
11:41 you know, most people will tell you this,
11:42 I don't mind a lesser rent if I can find a suitable tenant.
11:46 - Yes.
11:46 - Now do you want to go through that in an investment?
11:48 That you want lesser yield
11:50 because you want a better person, right?
11:52 So as you start going down that day-to-day activity,
11:57 the investment case is clear that if it is not
12:00 for an apartment, if it's a mutual fund,
12:02 and even if it is the same rate of return that a SIP
12:07 can give equivalent to a home loan interest that you pay,
12:10 which is let's take today's home loan interest rate
12:12 of nine and a half or 10%.
12:13 - 10%, right?
12:15 - That same 10% that you pay will be on a reducing balance
12:19 on a home loan.
12:19 - Yes.
12:20 - But it'll be compounding on an SIP.
12:22 - But then what about the argument for the tax advantages
12:26 that you get in the old regime, I must point out.
12:28 - Yeah, so whether we take the old regime
12:30 or whether you were doing this only from a tax angle.
12:32 So there are people who bought an additional home
12:35 because they thought that--
12:36 - Two lakhs of interest every year.
12:37 - Yes, and even some bit of principal and interest,
12:40 both they got tax benefit in both the cases.
12:42 But the question is, does it add up
12:46 the whole tax benefit thing?
12:48 Now, if the tax benefit thing and the rent
12:51 that you got was good enough and the tenant was good
12:53 and the appreciation happened.
12:55 You see, there are so many ifs.
12:57 - Yes.
12:57 - There are few people who have made all these ifs well
12:59 if they bought right.
13:01 For example, the same apartment you bought
13:03 two years before it was launched.
13:05 - Yeah.
13:06 - Could be that maybe you'll almost make it even Stevens
13:09 or you leak out a profit.
13:10 But why do you have to go through all this?
13:12 - So, but you've done the math, right?
13:14 And you've just assumed 10%,
13:16 which is I think a very, very conservative number
13:18 because you're talking about anywhere between 12 and 15%.
13:22 Just look at the last five years, right?
13:24 You've done incredibly well in any,
13:26 even if you invested in a nifty 50 index fund,
13:29 you've done incredibly well.
13:30 14, 15% on average.
13:32 So therefore, you've done the math.
13:34 How much does it amount to over a 20 year period?
13:37 - So let's take a simple,
13:38 let's take approximately like a,
13:40 if someone wants to buy a one crore rupee home.
13:41 - Yeah.
13:42 - We know those homes are not there, but.
13:45 - Just for the sake of argument.
13:46 - About 10 to 15%, you have to shell down your money, right?
13:49 To buy that home.
13:50 - Yeah.
13:50 - And the balance 85 lakhs,
13:51 even if you take a 20 year loan at 10%,
13:53 give or take a paying a 75 to 80,000 rupees EMI.
13:57 Now assuming that this was an investment requirement
14:00 and you're also getting a rent,
14:02 if you were able to take a part of that money,
14:05 which is about, let's say 40, 50,000 rupees,
14:08 and instead of the EMI, you put into an SIP.
14:11 In fact, the SIP should be the full 75,000 or 80,000.
14:14 At 10% or a 20 year,
14:16 the money could be about three and a half crores.
14:18 - Right.
14:18 - Now the question is in the 20 year period,
14:20 will that one crore home be worth even two,
14:22 two and a half crores?
14:23 - No, and also you're going to increment your savings.
14:25 So that's even more than what you're assuming.
14:27 - Yes.
14:27 - So it's very significant.
14:28 - And that is one, but the minute you stretch that 10%,
14:31 to say that, like you said, an index fund,
14:34 you know, NIFTY at a 10 year period
14:35 is given little over 14%.
14:37 - Sure.
14:37 - I am not even going on multi-cap and mid-cap
14:39 because those numbers are staggering, right?
14:41 And if you take even a 14% CAGR over a 20 year period,
14:45 I mean, you can buy five apartments at the end of 20 years
14:48 and new apartments.
14:49 - We're talking about a lot of people, in fact,
14:52 who've decided to bite the bullet.
14:53 And what, according to you, are the major pitfalls to avoid?
14:58 And then we'll talk about tips and tricks.
15:00 - Yeah, so it's good that if you've decided
15:03 that you're going to buy a house and you're going to live
15:05 and, you know, get your family to also enjoy the house
15:08 along with you.
15:09 There's nothing like having a roof over your head.
15:11 - Yes, your own.
15:12 - Absolutely.
15:13 And there's no worry or instability
15:16 of having to move out place to place,
15:18 even though you may want to live a mobile and flexible life.
15:21 You need one home.
15:22 Now, a couple of things that most people miss out
15:25 in this journey of buying a home
15:27 is you know that the bank will fund between 80 to 90%.
15:30 What you don't realize is that there are other costs
15:34 to begin with, there are legal costs,
15:36 there is the sub-register costs
15:38 that when you go to the local municipal corporation,
15:40 you've got to pay a fee to register the property.
15:42 - Which is a percentage of the ticket price.
15:43 - Of the overall deal.
15:44 - And quite substantial.
15:45 - It is, any state in the country, it is substantial.
15:48 And that's the revenue.
15:49 - What, close to 2%?
15:51 - No, in Karnataka it's about 7%.
15:53 - What are you saying?
15:54 - Yes, on the price of the property.
15:56 - 7%, so you'd be paying seven lakhs out of one crore?
16:00 - Yeah.
16:01 - Over and above the one crore.
16:02 - Absolutely.
16:03 - And is it on the higher side, Santhosh?
16:05 - So basically, that's when some people tend
16:08 to undervalue or overvalue the property,
16:10 but whatever the property that you agreed
16:11 and transferred the money or paid,
16:14 it is give or take 7%.
16:15 - Wow, okay, so definitely, I didn't know that.
16:18 Clearly, I'm not in the market for a house.
16:20 But having said that.
16:22 - But don't forget that, now, okay, you do all these things
16:25 and at some level, you cross the mountain
16:27 and you've arrived and now you own your home
16:29 and when you walk into it, you're walking into empty walls
16:31 and it's what you call a warm shell, right?
16:33 - It's a shell, yes.
16:34 - At best, the builder will give you maybe doors
16:36 and a good coat of paint on the walls.
16:38 - Hopefully.
16:39 - Now, hopefully.
16:40 Now, the interesting part is, you'll want a nice house.
16:43 You wanna make it cozy, you wanna make it livable,
16:45 you wanna call your family and friends over.
16:47 Now, that is the bit of a surprise.
16:49 Most people think that I can finish it at 5%, 10%
16:54 in a few lakhs, but it's surprising that thanks to
16:56 the way things have moved and the quality of products
16:59 for interiors and decorative stuff.
17:01 - And the cost of products, the inflation, everything.
17:02 - I think you'll have to plan a minimum 20 to 25%,
17:06 if not more, because you just look at the math.
17:08 Instead of the regular tile, you wanna go in for granite,
17:11 the cost is double.
17:12 From granite, you wanna go to marble, the cost is 4x, 5x.
17:15 - And then you wanna go to Italian marble,
17:17 it's even higher.
17:18 - Yeah, and then nobody wants the regular paint,
17:20 they want decorative paint versus wallpaper.
17:22 And you walk into the kitchen, the kitchen cabinet
17:25 starts with five lakhs or seven lakhs.
17:27 And then you want your fancy shower cubicle.
17:29 All these costs are not factored in when we are buying,
17:32 because when we are buying, you are--
17:34 - You simply focus on the ticket price.
17:35 - Yes, you're focusing on the ticket price.
17:37 You've already hit with the 10 to 20% extras
17:39 and all the other costs.
17:41 Now, you're hit with another 20%.
17:43 So therefore, if you're planning for 100%
17:45 of the money for home, budget for 130, 140%
17:49 so that you're comfortable.
17:50 Don't forget, you need appliances and gadgets for the house,
17:54 which more often than not is forgotten.
17:57 And today, a fridge doesn't come cheap,
17:59 and without air conditioning, you can't move in.
18:00 So these are things that are practical.
18:02 - Yeah, they're practical, so therefore,
18:03 budget for 130 to 140% at the very least.
18:07 See, the other major aspect that I find a little stuck,
18:13 a little worrying, is that in order to make
18:16 that 20% down payment, you are eroding a large part
18:20 of the savings that you've probably taken a few years
18:22 to put together.
18:24 And people say, okay, you know what,
18:25 I'll worry about my retirement or some of my other
18:27 long-term goals later.
18:29 I need to buy a house.
18:30 How dangerous is that?
18:31 - It is, it is very dangerous because,
18:33 one, that's now sunk and it's gone.
18:36 Number two, if you at least use from your savings,
18:39 it's okay.
18:40 Now, just imagine, even for that,
18:41 you had to arrange it through an emergency
18:44 or a short-term borrowing, you're further deep in leverage.
18:48 Now, for a sound person who's planning this well,
18:51 that 15, 20% should be through savings, ideally.
18:54 Second, you have to figure out as early as possible
18:58 to replenish that in high-growth assets
19:01 because your home loan is for 20 years.
19:02 Similarly, even when you make your investment plan,
19:04 keep 20 years in mind, you replenish your 15, 20%,
19:08 plus also ensure that the physical asset is taken care.
19:11 Now, you need to have enough financial assets,
19:13 at least a couple of times more than the physical asset.
19:15 - Is it a better idea, therefore,
19:17 even if you've decided to buy a house,
19:19 to defer it a little bit if you don't have enough
19:22 of a corpus that you've saved up,
19:24 and to set a goal, to say, okay, five years from now,
19:27 I will buy a house, but I need to accumulate
19:30 a certain corpus for that down payment,
19:32 and I can't touch my retirement fund just now.
19:35 - In fact, I think that's probably the only way
19:37 one should go about it.
19:38 That if you know the place that you're gonna buy,
19:41 set aside the minimum down payment
19:43 from your free cash flow, which is essentially
19:45 what we call our extra or miscellaneous
19:47 or general corpus of the funds.
19:49 Use that money because using any other quantum of money
19:52 will actually cash-strap you in the short term.
19:54 - How much of a loan should you take in terms of the EMI?
19:57 In terms of, okay, of course, there are various factors here
20:00 and it's, again, it depends on the context,
20:03 but as a percentage of, say, a double-income family,
20:07 how much should the EMI be to the maximum?
20:11 - So, as a banker, the person looking at your home loan,
20:16 if your total EMI that you pay is going to be
20:19 under 50, 60% of your gross income, they'll be happy.
20:23 But in some cases, because they also know
20:24 real estate appreciates, they go to 70, 80% of it.
20:27 - Because the underlying cover.
20:28 - Yes, the underlying cover, it's a collateralized asset.
20:31 But if you can keep it below 50%,
20:34 then you're taking care of two things.
20:35 You're running and maintenance costs
20:37 as a home and a family, and also you'll be left
20:39 with some money from the gross income,
20:41 X of EMI, to also save.
20:44 - And also, so the other factor, of course,
20:46 is that in three years, hopefully your income
20:47 has gone up by at least 10% per year,
20:50 and you are able to then increment that saving.
20:52 - So, ideally, the incremental income
20:55 that you start getting post your home loan is started
20:58 should help you increase your monthly savings.
21:01 For some people, where there's a disproportionate gain,
21:03 because as age and experience,
21:05 they start getting better salaries
21:06 and get recognized in their careers,
21:08 you can actually even figure out
21:09 how to pre-close the loan earlier.
21:11 - I was going to ask you,
21:12 should you always aim to pre-close your loan?
21:15 - Considering that you have a ticking time bomb
21:17 of an interest that you're paying,
21:19 there is a sweet spot of value of money
21:22 versus the interest component and the leverage.
21:25 Value of money versus leverage and interest component.
21:30 If you can wind up in between eight to 12 years, you're good.
21:33 And if not, don't beat yourself.
21:34 Even 15 years is fine.
21:36 There are many I know
21:37 that they don't disturb a 20-year home loan,
21:39 but every incremental money
21:41 is parallelly building financial essence.
21:43 - Okay, so again, we've talked about several aspects
21:46 that you should bear in mind if you are buying a house.
21:48 Santosh Joseph, I'm asking you now,
21:52 if you were to be forced at gunpoint,
21:58 now I'm making it a little dangerous for you, yeah?
22:01 If you were to be forced at gunpoint to say,
22:04 should I buy a house or live on rent, what would you say?
22:07 - Well, the answer is purely for your benefit.
22:13 - It's gunpoint.
22:14 - I know, purely for the benefit of the person
22:17 listening to us.
22:19 If they are okay that they do not have
22:23 an emotional attachment to a home,
22:24 if they invest their money, at the end of 20 years,
22:27 they can buy a way better home.
22:29 Maybe a bigger plot of land or a bigger apartment
22:32 or maybe a villa and not worry about EMI and stress.
22:36 But remember, the caveat comes with,
22:38 you have to be disciplined to put that equal amount of money
22:42 to let it be in growth assets
22:44 that can give you a multiplier effect.
22:46 - Absolutely, and use the velocity that compounding
22:49 can give you over a period of time.
22:51 So, Santosh, I've put you at gunpoint
22:54 at the end of this conversation.
22:55 - Well, I think you did the right thing
22:56 because somebody needs to say it as it means
22:59 because there's so much of WhatsApp University messages
23:02 forwarding saying, "Don't rent, buy, don't buy rent."
23:06 But people need to know that it will work
23:09 if you want to make it work.
23:10 And the clear answer as far as the end result
23:13 is that instead of having an emotional attachment
23:15 of just a home, an investment will give you
23:17 far superior returns.
23:19 - Absolutely, on that note,
23:20 Santosh, thanks so much for joining in.
23:22 - My pleasure, Alex, thank you.
23:23 - And to you, dear viewer, let us know what you think.
23:26 Viewer or listener, I should point out
23:28 because you might just be listening to this.
23:30 Let us know what you think
23:31 on any one of our social media platforms
23:33 and do stay tuned, lots more content on NDTV Profit.
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