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Correction 1: If Rent Increases then monthly saving decreases and investment also decreases, Returns also decreases Correction 2: Govt will not give complete rent as exemption, Use HRA exemption calculator to get right numbers Correction 3: Avg Interest rate on home loan for Long term will be far higher than 7% Correction 4: Effective interest rate for 7 perc home loan comes around 5.6 perc(*Upper cap of 2 lakhs tax exemption on home loan interest). Correction 5: Link to Excel sheet missing in the description. Correction 6: Compound interval was calculated monthly for RENT and Yearly for buying a house. Correction 7: We should see the value of property vs Total value of investment after 15 years. Need not to calculate net benefit.
Absolutely right. Even the 7% rate is the lowest in decades and has already gone up to 9-10%. The rate of growth in real estate has stagnated in many Cities resulting in near even negative rate since the last 10-12 yrs. Considering these issues the cost of owning the house in current time is not a good investment strategy at all. Only the 80s kids and earlier would have seen some good returns on their Real Estate investments that were acquired at a fraction of current market prices. The rest can just rent it from them rather
You dint discussed what's gonna happen after 15 years ....there would only be maintainance cost and no interest cost .....so buying is better in longer term
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Well Investment principles changes every time . You are lucky if your parent owned a house . As rightly said you can't keep multiple properties with 2% rentel yield
Emotion hi toh baaju mein rakhne hai na sir. You most probably won't survive the same job for 25-30 years in today's dynamic industry as well as the same city especially if you are in service sector.
Madam post tax rebate, if we are getting the interest rate at 4.9%, and inflation is considered at 6%, then isn't it -1.1% interest? I am stuck here🤷♂️
I don't like the lack of freedom in rented houses. You are always answerable to the landlord. Even flats are not completely yours. Individual houses are the way to go even if it's a small one.
What kind of lack of freedom do you mean? If it's an apartment I understand there are a lot of rules but an independent house can be modified if you're a long time renter and when you leave the modifications can sometimes benefit the landlord right? Just want to know your view
@@uthkarshrajeshwar6525 owners allow you some modifications but like I said you always need to ask for permission. Also many owners set a lot of rules like other people are not allowed to stay and stuff. As for flats you know how annoying the flat association is. I have a friend who received an email from the flat association saying bachelors are not allowed in the flats even though it is his own flat. Imagine a rented flat..
If you like retired uncles tracking who comes and leaves your home, buy a flat. If you like to be told what isn't allowed in your home, rent a house or a flat. If you like freedom and quality of life , build a small home in a good locality.
U can make the changes in ur own house. Colour furniture garden .but rent house every 11 month .n landlord thinks tentent are nothing as compare to him
We both are working couple. In 2011. We purchased a 2bhk flat in Navi Mumbai at 22 lacs and the EMI was 16500 which was equal to one of our salary. Now after 10yrs our salary is 80,000, the rent is 10,000-12000 and flat price is hiked from 70lacs to 75lacs. I think it was our good decision at good time. By taking this decision I think we have reduced a major tension of instability and struggle for permanent accommodation in our after retirement and next generations life. After retirement when peaceful environment and relax life with complete family members is most needed, our income becomes limited, Big or small health issues arises, chances of getting loan becomes low, at the stage of life when we are physical, mentally and financially insecure, unstable and unable to take risky decision, at that stage of life the feeling of owning a home becomes wise decision.
i dont think a 2bhk flat will last by the time you guys are old and why would you live in Navi Mumbai when you are old its too costly , you can build a house in a countryside with peace before you retire
@@bhargavreddy7038 in Navi Mumbai commonly minimum life of a building is 50yrs. After that, when the building comes for redevelopment, you get more FSI and latest Amineties. Now why Navi Mumbai and not country side. We own agriculture land and house in country side but we are born and brought up in Mumbai, working in Mumbai, relatives, friends in Mumbai, adapted to local transport like train, Bus, Taxi, mono and metro. From Ulwe You can travel to any place Mumbai, Thane, Pune, Goa, by good Road connectivity and by international airport all over the world. After retirement In old age, you need a City equipped with modern and multipurpose Hospitals with good health facilities which lacks in the country side. When you have spent most of the life time with busy, rushing, fastest shedule, online services, your lifestyle, your body and your mind are adapted to this environment. you can visit for a change in country side but can't stay for more than a month.
There is one major flaw in this calculation i.e The saving on EMI, the Effective rent will increase over the period of 15 years, whereas the EMI will remain the same. Hence, the saving on EMI will be much less.
@@asinghal9666 if you refer to the calculation sheet given in the description, The saving on EMI of 36082 is calculated by subtracting effective rent i.e 14000 from EMI i.e 50082. then it was bought to future value. the effective rent will increase over the period of 15 year
1. HRA benefit isn't plain 30% of the rent, you need to reduce 10% of basic. 2. Whie taking the difference in saving to be invested, you need to account for the rent increase every year. 3. The difference you have shown in driven by 6% return on home whereas 10% otherwise. 4. In places like Bangalore or Hyderabad, monthly maintenance is paid by tenant. 5. Even by 3% rental yield benchmark, monthly rent for a flat worth 75 lakhs shall be higher than 20K.
Similarly, saving the money while staying in rental house is giving money for more and more fruits to your children. You may even buy different fruits rather than sticking to only 1 type of fruit.
This is the nonsense that real estate sellers say. Fact is, your kids will immigrate to bigger cities for better jobs. Unless you buy in South Mumbai, this argument is nonsense
@@manishjape3196 thats difficult as saving money in other ways is more difficult , property rates will always be well ahed of any other comodities after 15 years
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Rachana this is like comparing marriage vs staying single. Obviously staying single will win at any given time. You save lots of money too if you stay single.
Depends. If the spouse also works. That is extra income, and hence extra savings and investment..... Right? Of course all this is just opportunities. Financial discipline is very important and that is lacking
I dont think that both things are analogous to each other. Rachana is only presenting financial angle as she explained in the beginning. If one is invested in emotional angle then this video is not for him/her. He/she can still buy house so as to have that emotional satisfaction. Marriage cannot be compared for this since it is "almost" a social need for a human. The way someone is not going to stop eating for saving money on the same line one is not going to avoid marrying because of money (but ofkos exceptions.)
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For those planning to buy a readymade house (which anyday feels altogether different {emotional angle} over renting), Try if you can rent a house in the same locality where you are about to buy, ideally the same society and see how it feels, experience on rent the good and bad of that locality. This way you will be fully assured of go ahead or look for another society instead of committing and adjusting to that locality, ofcourse at some added cost but we don't usually buy house every year, so this effort is totally worth and also try to set aside EMI amount to see if you are financially comfortable in committing to such long term loan.
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Although she deducted the cost of buying a house to compute net benefit in Column G32 but She missed to deduct the amount deposited from the net benefit in column B26 :D The final benefit of renting the house as per her expected return on investment in case of renting a house will be (1,57,43,750 - 11,25,000 - 36,082 * 12 * 15) = 7605000/- Benefit Renting a house: Rs. 76,05,000/- Benefit of buying a house: Rs 72,49,798/-
People who tell that renting is better than buying, they have there own home. I don’t understand why they tell like this. One should have at least one own home for permanent stay.
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IMO, mutual funds in India are much better given that, in the current state of real estate in India, the rental yield is too low (3-5%) in most cities, esp. in metros. Also, there are benefits of liquidity with mutual funds. However, if you are looking from the point of view of having a stable (and less risky as compared to mutual funds) income for let's say retirement and have some money to spare to buy the property, second house may be a good option.
You just showed what we save at the end of 15 years, but the one who stays on rent does not own a house after 15 years and continues to pay rent, whereas the one who bought it, will save money and will have the house as well.
I have a golden reason here to rent a house..if I have 85 Lacs saved in 15 years by renting a house..I will go for world tour with wife in my early young age..which may not be worthy after 15 years...so renting house and enjoying tours for 15 years is the best option..as we have only one life....the owned house would not come with us in heaven...🤣
well after 15 years of saved money in more liquid assets you can buy a home of it. + renting gives you better options to move across for better income. so you can retire or buy a house in a tier 2 city and enjoy low cost of living
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The amount saved by renting will never be in ur bank account as savings to buy property after 15 yrs.. it will get empty by buying luxury car or an expensive vacation and finally roadpe
That will be from an emotional point of view. Luxury cars and expensive vacations are emotional decisions. From a financial point of view, you have to be practical, and that means you will be saving it diligently and investing in a market linked instrument like Mutual Funds. Keep emotions out of the game if you want to do a financial/practical comparison.
I feel that after 15 years ,in the rented place expenses will keep on increasing but once you complete EMI in your own house , the expense is only the maintenance.
After 15 years you will have home or if you are renting and saved emi amount then you will have 1570000 rupees in your pocket so calculation is correct in one hand you will have home and in other case(Rent) you will have 1.6crore in your hand
but your investment will also increase at 10% , it was already 1.5 Cr . 1.5 cr annually at 10% generates 15 lakhs .More than enough to cover rent , monthly expenses child education , thought of this ?
rented house is good for corporate couples but for ones(like me) who have their family responsibilities as well, they can't shift their parents to a rented house. With your own house, you have a mental satisfaction that yes my parents are there and the house is theirs. But if I want to live separately with my partner then choosing a rented house is the best option
The best suggestion i can give based on my personal experience is ( keeping Hydreabad, Bangalore and other Tier 3 cities in view)... Rent an apartment in the city and buy open plots in different parts of the outskirts of the city from your savings and by taking (personal loan or plot loan)... These open plots cost may vary from Rs.5000 per sq yard to 25000 per sq yard.. with in 15 years these open plots can give you appreciation of 200% to 1000%. (based on the plot values that myself/my friends/relatives bought in last 15 years in different outskirt locations of Hyd and BLR i'm giving these figures)...
Wonderful approach. However your timing is excellent. You bought it during the CBN effect. Now the city growth stage is at peak. The effective growth will be slow if someone buys now when compared to your timing.
Me a robert kiyosaki fan : I will buy a house and then rent out 2 floors . 15 years later I get my investment back. I neither paid rent nor any emi from my pocket. Buy assets that gives income 🙂. After 15 yrs, life jingalala 😎
@@sagarkulkarni2590 First of all I never talked of 3 floors . I said 2 floors ! And I live in south mysore. The price of land in affordable and a 2 floor house is not a big deal ! I have relatives who make a living just by rent itself. They own 2 building. Bank emi is paid with the help of 3/4th income from 1 building. Rest all pocket.
After 15 years i.e., after completing my EMI, from 16th year I have to pay only maintenance amount for my house and live there through out my life time. But in a rented house I have to pay rent even when I am 70 years old.
yaaa i dont know why in india people think that they will plan for leaving 150 year of life...after 70 now 75% parents are dead or rest all leving in ashram or hospital...
@@kunalahuja1272 but average house age is around 60 yes so I think after 15 yes when you own your house you will be saving so much amount..it's just a thought I am not an expert
Imagine pain of moving after 11 or 24 months and what about of renovation and buying your favourite furnitures and artifacts for your house. I think you should not have more than 1 house instead invest in property in village agricultural land so that atleast you have food if things worse than covid come in future. After all, we all are going to office for food but even that is also not guaranteed, having an agricultural land guarantees food atleast.
@@foreverkushal Very true, because when you rent a house, once the rent paid your amount is zero. However, when you pay EMI, you are owning the property. You are getting an asset and the value of property also increases. In case of renting the house, you are still paying rent after 15 years and when we take a loan after 15 years, we have our own house and no rent :). When we pay rent of 20,000 monthly with the interest rate of 5%, FV after 15 years is 53,45,778.88
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yes, its yours for atleat next 100 years, but the point is that in today's globalized job market, if you are an employee, you never know where need to migrate due to employer's demand or own career growth. So if you are buisnessman, who have well established buisness in acity, buying a house in a posh township will be a good option. else you can rent a worthy house in a sub-urban area.
The comparison is done at the end of 15 years, you can just keep this calculation extending for more years. So the point of having house forever is not valid.
@@ankanmazumdar5000 but how many days you are going to work at some point of time you need to be take rest at the time you need definitely some property
Yes the.fact is that people will regularly pay bills that needs to be paid but the amount which is saved by renting house (35000),they will not reinvest it and spend it until all money over😀...moreover all these are assumptions in some areas like hyderabad and delhi the properity increase rate is more than 30% a year...so, think yourself...😇
@@ganeshudathala5286 property application is 35% in last 10 years in Gurgaon. You can check prices of new Gurgaon. And DLF flates buyers in negative after 7 years
@@ganeshudathala5286 bhai olf flats ki value decrease hoti h after 12-15 years based on builder and construction quality. Dilli wale to nale ke upar wala ghar bhi lelete h dilli me
Very well explained. As far as I'm concerned, I would buy a house, irrespective of the calculation, if I intend to stay at a place for more than 15 years. I wouldn't want my family to keep moving from one place to another & I don't want to live at the mercy of my landlord.
In 20 years I bought and sold Six properties and also lived in each of it for 3-4 years. Now I am living in a Rented house after our Retirement and are very much happy and satisfied with it and left with A Good investment Made in the last 2-3 years and getting a decent ROI... My experience says it all, When you have two incomes and young, buy properties and live for 3-4 years in them and sell it when you get a decent resale value, buy elsewhere and so on and keep doing it till you are 55-58 and by 60 Stop investing in properties, sell them and accumulate funds and finish off All your Life commitments. Then Choose A good rented house with All those amenities and facilities, keep paying rent for the rest of your life and in case you get bored with the same house just keep changing to New homes every 4-5 years, change area, even city like what we did and I assure you you will never feel bored in your post retirement period...🥰😂👍✌️😍
@@SAGARTHAKUR-zn7vq You owe them a strong foundation on which they could build their life upon and no more. You definitely dont owe them wealth. In fact if they get things ready-made on a platter, they will never understand the value, will not be able to hold on to the wealth and will blow it away within 5-10 years. lots of proper studies done on this - if you care to do your research. And there is a different pride to building your own life and wealth instead of living on baap ka paisa. Talking from experience - been there done that.
the property value is only in papers. You can't the sell the house you live in. The assets created while renting is 1.5 crore in liquid cash. You can buy a house directly if you feel like after 15 years or continue to live in a rented house. Your choice. No one buys a 15 years old house as those rates. Would you buy a 15 year old flat?
Video is awesome. But we've got one life, by practical means renting might seem sensible but we need to keep our heart happy as well. Being either all practical or emotional is dangerous, there must be a balance always.
You missed double brokerage, registeration charges, shifting charges, packing charges (if taken packers and movers service) etc for renting a house. + the hassle of changing houses time and again. (Hunting for house, packing, shifting, unpacking, new neighbours everytime etc all these things are tiring and exausting)
Plus the pain of getting your address updated everytime on your Aadhar, DL, passport, voters ID, Bank, gas connection etc., In cities like Navi Mumbai, the brokerage (minimum a month's rent) needs to be paid every year whether one shifts the house or not.
@@Sudanmadhu7 lol you are being taken for a ride by your broker. I have lived in Navi Mumbai also. Pay brokerage once and never again for the same property.
@@Sudanmadhu7 Exactly. This is the major deterrent in the renting decision. The instability. You are always at the mercy of the landlord. And this is the major factor that outweighs all the financial advantages the renting option may show on paper. If I want stability, I will never go for renting option, howsoever cheap it may look. This video should have covered this major factor
@@vkajarekar Most of the landlords are d*ck , they will never given pan number , so people are not able to claim full hra benefit, they have to submit fake proof even for real payments
Usually, I feel people are more interested in making a video than to think about logic... You have actually covered each and every point like a true BANIYA... Really liked your video... Keep it up..
how about the benefit of rent/ emi free house after 15 years..that had not been computed. assume at age 25 you are lucky to get this loan and buy the house then after age 40 until retirement you will live rent free and keep appreciating.
If you make the right financial decisions, you will save enough money to retire early and buy a house of your choice, rather than making builders and politicians wealthy.
This is exactly what is was thinking, plus after 15 years you won’t get property in same location if you get that too will be very high. Also , Home loan is forced saving . Rarely any body will invest 50-60k for savings. I believe this happens in reality.
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But even after 15 years you need a house and that time the cost of the same house is higher than what we saved during that period via renting house even at 6% property grown rate. We have to consider this as well.
Arrey. This is not required. You should understand financial. If at all you need to buy then. You can still buy a 15 year old home for less than 1.5 crores easily whereas you have saved 1.6 crores in rent. Also, no surity that you will stay in same city over 15 years in this fast moving world and selling a 15 year old home is not that easy. Moreover she has given just 10% CAGR for investment. Any debt funds gives that. If at all we are decent on investment and go for bluechip funds or Nasdaq funds one can easily expect 13-15% CAGR then obviously rental is better.
100 percent. I see flaw in the logic used the video. In 15 years time, that 1.07 crore flat will cost atleast if not less 2.5 Cr. I have seen that change in our property as well.
@@dewanmohamed9167 True but when everything is hypothetical, then why not consider this as a situation too. With proper maintenance, one can use the property for as long as 50 years.
Try to invest in different strategies which will give you on avg 10% cagr.. You have to outrun the Inflation rate of 6%. In 15 yrs compounding you will have good amount to purchase the house
That extra cost is paid for the luxury of the "OWN Feeling".. its the cost of living in ur own home. The emotional value is much more than the financial value. To be precise ... " tyaa welechi tya kshananchi mojleli kimmat aste... we are humans... not robots... " .. paisa upar leke jaa nahi sakte :)
Hi madam, You missed one point , once we own a house it's just not you but for your future generations as well and value keeps adding. Very big asset to future
Also, several landlords charge advances (sometimes ten months’ rent, particularly in Bangalore) that gets locked up and only a part of it is returned to the tenant citing damages made to the house.
Quick queries on total cost of flat 1. What if we are purchasing the flat permanently? Rather than 15 years 2. What if we pre closure the home loan? 4. What if we purchase the flat in under construction project? Where you get time to submit your own contribution 5. What if you are leaving in rented apartment and owner asks you to end the rental contract where your school and other day today setup is established? 6. Are you able to design the furniture and interior in rented apartment even after your financial condition is improving So if you think atleast buying one own flat is good deal
@@priyanair5686 easier said than done.. Finding somone Is a task negotiating rent(pay to real estate agent since you are in different city), paying property tax + maintenance. Society would want you to be present in meetings and decision making.Flat Repair expense. After every 2-3 years after tenant changes. Assuming there is a gap of 2-3 months after every tenant goes. The flat that I am staying in was vacant for 6 months and hence the owner gives in less than market rate and fears that I will leave the house he will face the same problem.
@@priyanair5686 Issue is, like in this example, rent I'll get is 20k but EMI I've to pay is 50k. And then, when I move to another place and stay on rent there, I've to pay another 20k.
You forgot to add intangibles of buying..Stress we would be carrying for 15 yrs..Health depreciation due to stress..Sleepless night for 15 yrs.. And if we lose the job then forget everything.. :D
But buying a house would secure future for your children also, and btw whatever it is life is always stressful. Every month paying rents around 10 k is still like paying a unknown to make him grow. Instead the same 10 k u can pay emis for loans n own ur house for life time and for next generations
It may not be possible to own a house in cities. Find the right owner. I'm staying in a rented apartment for over 10 years and I haven't had any issues.
@@venomium4360 Of course I will move but I will definitely find the right owner. In case of apartments, there is no big difference between owning and renting. Only thing you can't modify anything. But, you will have the freedom to shift in case of any issues. Selling is far more difficult.
hi, rachna, very few people know how to smile from eyes. Your eyes smiles. Keep it up. There are lot of people who praises you about your explanation of topics. Keep smiling.
Dear Madam, "Saving in Monthly EMI " -> It gets reduced every year due to increase in annual rent i.e. 7% which will subsequently reduce "Value of EMI saved " for total rental period. Was it being considered in this excel ?
Honestly, the property appreciation value is also flawed, the reason being ageing! Property does not always appreciate, dilapidation causes massive losses and Maharashtra has the worst redevelopment rules.
Paheli Mumbai hie ek city thi toh 13 percentage appreciation tha Mumbai me ab toh pune nagpur nashik navi Mumbai Thane bhi options me hai to appreciation 8 percent se jyada kahi nahi hoga Real estate will not good as investment As it was for last 2 deacade
While calculating "savings in monthly EMI", Why haven't u considered the average annual rent increment of 7%. Rent will increase annually however EMI will remain tha same which will lead to less savings in coming years.
Rajat is right. She mentioned it in the initial segment when she was calculating the cost of the rental house over 15 years. She did not factor for the increase in rent when calculating the savings in monthly emi. The rent increase will mostly eat up a lot of the benefit.
there is very much less value for building or falt as it really old ....only land where flat is there is value...if any builder do any new building on ur current flat then only you get good value...
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Have you considered the deposit amount in case of rental property? Further, the hassles of shifting the rental place atleast once or twice in span of 15 years may also affect the calculations.
The calculation needs to cover deposit amount, constant shifting amount charged by mover and packers, cost of investing time in finding new place every new year till the time you find an owner that puts only 7% increment. Usually the increment is 10%. Also, even if we rent house, we pay society and maintenance charges. And the cost of time that we invest in convincing the landlord for basic changes. The calculations seems very lucrative but practically, there is no saving if you live in constant fear that someday your landlord would throw you out of the house for any stupid reason. In all such calculations, the analyst don't consider such mental tortures and the price we later pay for mental health counseling.
@@archanarelan7906 indeed I'm new in delhi and i took 2bhk on rent , i paid brokerage , advance rent as security , ac installation , now after a year again now i shifted to somewhere else near to my job location i paid apx 40k again rent + security plus brokerage loading unloading again tv ac installation charges , it would be better buy a house on loan and live peacefully
One point missed here, I feel, is at the end of 15 years we land up with a house + 70L cash in hand. But, for a rent option, 1.5cr is left. I personally feel 70L + house is a better gain than 1.5cr of money. 1.5cr may not buy you a home you wanted.
tipical indian midset you can easily generate 25% to 30% intrust ....selling after 15 years u dont get loan for ur new buyers i can say max u will double the amout which u buy for tge house and property price will increase only if new builder build new building removing ur present one then u can accept more..
So technically what you are trying to say is that you gonna stay your whole generations in rented house cos you don't own a house. And after 15 yrs, with that 1.5 cr you won't get the same house which was worth 75 lakhs. On the other hand when you own a house worth 75 lakhs, after 15 yrs the house will be worth crores plus the 70 lakhs i saved.
@@ambitionmoirangthem if your builder he will sell thats his job...who and and staying that house that no sell...if they have only 1 house.....but equity u can sell or by... withen no time....
@@ambitionmoirangthem well I didn't mean that. All I was telling is if you'll own one house then you've to stay there for whole life and my profession is pretty unstable in starting phase so it may cost me a huge lump of cash and still there is no guarantee that i'll stay there. so for me renting a house till my late 45 is good option. After that I'll surely buy one as till that time my kids needs a stable life. Guess what, after that my house would have nice and modern devices and amenities as well. And choices can differ anytime so you may not be ok with my choices and vice versa.
@@amitojsingh5159 Lease is even more risky.. You deposit high sum with him on Condition he has right to recover for damages.. I have heard many people in Bangalore did not recieve their half of the deposit amount.. Reasons they gave are door lock is not working, electrical stuffs have malfunctioned, bla bla... On top of that 1 month rent will be recovered for cleaning and paiting... Edit: this won't happen if the owners are honest but how will you get to know who is good.. I changed house 4 times luckily all were very nice owners they deducted 1 month rent as promised..
Exactly. On Sunday late eve our landlord suddenly texted my husband to vacate in one month ASAP! Though we have a lease of 2 months! We are living here for last 6+years! it's really heart breaking.
i prefer buying your own house, there is no comfort like the comfort from your own house, but the only problem with getting a job that pays enough to get my own house
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As your rent is increasing every year, how your “Saving in monthly EMI” will be 36K for 15 years? It will reduce every year and In next 10-12 years your rent will be same as your EMI. Please clarify this point!
@@shriniwaspakalwad5178 That's true but when your rent will increase you won't have the same amount to invest. your investment amount will be reduced every year and at some point rent will be more than the EMI.
Point is why do you want to buy that house.. weather you rent it or buy it you are staying in the same house. End of the day you have 1.5 cr cash.. and if you have a apartment it's difficult to sell old resale property you will not have money in hand.. that's the whole point of this video.. if you emotionally make a decision you will have a concrete house which has paper value.. if you financially make a decision you will have money in had that can be taken out used for any emergency... As she said we Indians are always go for making emotional decision.
@@Aav27-l3k Financially, it's a 22 Lac hit that we take with the renting option. And renting has it's own cons. Moving every couple years takes a toll not only on finances, but also your family life. Your relationships, neighbors, wokplaces and schools, all are affected with renting a house. Makes no practical sense to me.
Don't know which 22lac you are referring to .. anyway as I said we Indians as you said live for others like partner , parents , relatives and neighbours that's what emotional means.. this issue is not there in other countries so most of them live in rent not caring about anyone and they live their life fully.. were as us we live for our others .. that's the fact ..
@@Aav27-l3k Welp, don't see anything wrong with involving emotions in a decision as big as this. And it's a misconception that people other than Indians don't involve emotions in such a decision. If any, are exception than the norm. Additionally, we also assume perfectly meticulous planning and our plans panning out as we think. It'll take immense serendipity for it to come to fruition as any calamity in those years of investment can wreck our plans and our future. OTOH, with immovable property, you lock in a safe future for yourself.
@@anupjahl8082 it wasn't a personal bankruptcy mate. One of his many companies filed for bankruptcy. He still has lot of money. His teachings in his book are very good, but we should not follow blindly what he says lol. We all are different and have different needs. Be smart and do what you like, because then you can't blame anyone else.
Actual tax benefit is 50% (in metro) or 40% of basic salary. In most of cases it's much lesser than actual rent payment. So in above example effective rent paid (in most of cases) will be 16K in stead of 14k
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Hi Rachna Ma'am, There's a glitch in the calculation of EMI saved, as it's been calculated based on the difference (of EMI - Rent) of Year 1. While the EMI amount will remain fixed over the duration of 15 years, the value of Saving in Monthly EMI will keep on decreasing every year based on the increase in rental value. So, Renting doesn't look lucrative at all.
The new trend I find in Mumbai is renting your own house and then rent a bigger better place. So you still have a house to fall back on if things don’t work out for you in future.
Nicely explained. But beyond the financial angle, one needs to also consider the emotional one: hassle of shifting (and cost), discrimination between tenants and owners in most societies, pride of ownership. In the end, I would say, one should own at least one permanent residence. Even if, as an investment it may not beat the market of even FD rates, and it is illiquid,
The number of house a person can own should be limited to one.... So that no body can rent a house... And the this business will take a hit then they have to sell houses at a less price and more people would be able to buy a house.
good analysis and yes, from a pure financial pov it always makes sense to 1. rent a house over buying one 2. travel in uber/ola over personal vehicles etc etc..but "aisa jeena bhi kya jeena" :)
In this age i would rather say renting is good Option. Ur financially free and u can grow ut fortune to buy a house later after 15 year.. u can pay the amount 100% and still save some money and invest them again to gain more... Buying house is mumbai is like purchasing a costly land in hell... Tbh
2 points are missing - 1. Minimum 4-10 months of advance. 2. Landlord can ask to leave house at any point of time. Then again look for another flat, as will never get the advance money back fully hence, that loss must be calculated. 3. Maintenance has to be paid even in rented flat as well.
Great Informative video ..but you have calculated direct 30% saving from tax on HRA ..but the actual formula is a bit different to calculate HRA exemption. Apart from that , I believe everything else is perfectly fine
Ma'am thank you for your inputs. I have recently bought a flat and I had done these calculations prior to purchase, and this is just my humble opinion. What this model does not take into consideration is the age of the person, view after 15 years, future uncertainty. Age - if the person is below 30 at purchase then he/she will close out the loan asap and not let it run for 15 years, so you pay less interest View after 15 years - you will still continue to pay rent where as house bought and cleared home loan will not have major monthly expenses, just maintenance and property tax. I may be even choose to go and stay in my native post retirement and rent it out and starts generating income which will majorly contribute towards expenses for non metro living. Future Uncertainty - losing job, death or fatal illness which creates a lot of problems to provide basic necessities. Yes you can withdraw the money you saved and cover for all this but to be honest, not many people have the discipline to invest so much money every year as they will use some of that money for expected and unexpected expenses. Home loan forces us and can't be withdrawn, which is in one way a good thing. There are both pros and cons. Shelter, Food, Clothing.. we need to secure these for our families no matter the cost. Rental housing in my view is good short term and gives mobility but I don't believe in it long term
ma'am ,I have something to convey, 1)as you calculated the net benefit of renting a house, it will only depend on if an individual invests that monthly EMI saving wisely so that we get 10% returns. 2) If monthly rent is increasing then saving will be decreased and investment will be decreased and therefore returns on investment will also get decreased, and so net benefit of renting a house will decrease. 3) In the renting section you calculated only the returns of investment( investment which was done by the saved money by not paying an EMI), which was the total capital an individual had after 15 years i. e. 1,57,43,750 rupees . But in the buying section, you have calculated only the net increase in the property value, *but* the an individual owns- the net property appreciation (72,49,798) + the money invested in buying the house(75,00,000) + after purchasing if he gives the house on rent (the total rent for 15 years with just 5% annual rise (if initial rent is 20,000) 5227238) = 1,99,77,036 rupees. (at the time of selling the house after 15years)
Most importantly…. When we buy house 1. Registration fees ( which is around 5% of total asset value ) 2. Interior expenses (6-10 lacs ) 3. New house ceremony expense 😉
I think the comparison at the end should be the amount of cash left after 15 years in both the scenarios and not the profit in case of buying a house. I guess we are making a wrong comparison here by calculating the profit. Happy to hear your views
Mam I Saw ur Video two years ago and I was paying a rent of 22K per month for a 2BHK in Thane. Based on ur logic I must be paying 25K as rent now. But in real life the rents in the market have gone insane. Thank god I bought a house and moved in. Same flat rent now is 35K. Even tough I am paying 65K EMI but it won't increase with inflation. And If I have waited for today to buy......with the current cost the same EMI would have been 12-15K extra and prices of houses have also gone up. So it's a learning that Excel sheets doesn't work out in real life.
@@sagarkulkarni2590 that depends on where u invest dude 😂 Hyderabad outskirts would be the best place to invest . As there are many upcomming developments . I invest in undervalued plots not the city center over valued plots 😂
