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Nikhil Kamath, co-founder of Zerodha, has revealed his preference for renting homes over purchasing them, citing what he perceives as exorbitant real estate valuations. In a podcast conversation in October, Kamath expressed his reluctance to invest in real estate at current prices, describing them as “ridiculous and retarded” given prevailing interest rates.
Kamath explained his stance, stating, “I could not get myself to buy real estate at today’s valuations because personally, I think they are ridiculous and retarded with interest rates where they are.” He disclosed that he currently resides in a rented house and intends to continue living in a similar manner in the future. Kamath clarified that the only home he owns is where his parents live, primarily for emotional reasons.
Elaborating on his rationale, Kamath highlighted the financial advantages of renting over buying. He stated, “If I am able to earn 10 per cent, 12 per cent on money deployed and I am able to rent homes in India at 3 per cent… it will never make sense for me to buy a home because the rental yield I am dishing out is significantly lower than the capital deployed, the returns they give me.”
Kamath’s remarks reflect a growing trend among individuals, particularly in urban areas, who are opting for rental accommodation due to soaring real estate prices. With rental yields often outpacing potential returns from property ownership, renting has become an attractive alternative for many, offering flexibility and financial prudence.
The Zerodha co-founder’s perspective underscores the evolving dynamics of the real estate market, where traditional notions of homeownership are being reevaluated in light of changing economic conditions and investment strategies.
Sources By Agencies
