After previously promoting renting over buying, Zerodha co-founder Nikhil Kamath has now revealed that he has purchased a house.
In a recent episode of his podcast, WTF is with Nikhil Kamath, he discussed the ongoing debate of buying versus renting with industry leaders Irfan Razack (Chairman & MD of Prestige Group), Nirupa Shankar (Executive Director at Brigade Group), and Karan Virwani (CEO of WeWork India).
Kamath, who is known for advocating renting, shared the primary downside he encountered. “The thing with renting, of all the advantages of renting, there is one disadvantage: you don’t have foresight as to when you can move out of the house. I had to move out of this house, whereas I might have liked to stay longer in this house,” he explained.
Take a look at the video:
When asked if buying a home contributes to financial stability, Kamath reiterated his dislike for real estate’s illiquid nature.
“I feel something like gold can give that to me. I hate the illiquid nature of real estate. Places like this have fewer buyers and if 10 people decide to sell then price goes haywire and pricing is very arbitrary in nature. Stock market in comparison has to have more people. If in a certain company, one million people decide to sell, then it will make significant difference,” he stated.
Kamath also expressed dissatisfaction with the stamp duty charges levied by the government on property purchases. “In stock market, I can buy and sell without paying 5% to 6% stamp duty,” he added.
During the discussion, the real estate experts debated whether buying and renting out properties is truly profitable. Kamath commented, “I think nobody makes money from buying and renting a place. You do not have occupancy throughout the year for something like AirBnB. Accounting for inflation and interest rates, the return on this investment is negligible.”
According to Forbes, Nikhil Kamath, one of India’s youngest billionaires, holds a net worth of $3.1 billion.
