Zerodha co-founder Nikhil Kamath's 'rather rent a home than buy' comment sparks debate
Billionaire entrepreneur Nikhil Kamath said real estate valuations are ridiculous and retarded and he would never buy property and prefers renting
Zerodha co-founder Nikhil Kamath sparked a debate on social media platforms after candidly admitting that he prefers renting a home over buying one since he believes real estate valuations today are inflated and are "ridiculous and retarded".
There was a time when millennials shunned owning immovable assets and preferred to be free of financial burdens like home loans. But, during the pandemic, experts suggested that millennials also known as 'Generation Rent' started rethinking their priorities when work from home became the new norm. And, real estate developers saw a surge in interest among millennials for spacious properties with good connectivity and as a good investment.
Nikhil, however, thinks differently. In an interview to Print, the 37-year-old made it clear that he found current valuations ridiculous and retarded and confessed that he will not buy property at all. He felt with interest rates being what they are, it did not make sense for the prices of homes and offices to shoot up
Furhter, Kamath revealed that he continues to live in a rented home and he doesn’t think that is going to change anytime soon.
The only one home that he has is where his parents live and he keeps that more for emotional reasons, he said, according to the report.
But it will never make sense for him to buy a home because the rental yield he will be "dishing out is significantly lower than the capital deployed, the returns they give me", he added.
His comments in the video have instigated discussions among social media users. Some supported Kamath's decision to just rent a house, while others believed that buying a home is a more beneficial move in the long term.
Bengaluru’s paper wealth
Kamath also pointedly mocked the wealth in Bengaluru as being more the paper money kind and not real money.
According to the entrepreneur, who made it to the 2023 Forbes billionaire list, Bengaluru mostly has paper wealth and very little expendable wealth.
People, especially working for tech companies, have paper wealth in the form of stock options and other paper assets, he said, adding that paper money gives the appearance of wealth.
Greedy for financial independence
Having been precociously greedy for financial independence at an early age, Kamath is a school dropout after Class 10. He honestly admitted that he felt insecure" when his friends started attending college. But he started earning at the age of 17 after bagging a job at a Bengaluru call centre.
His first salary was Rs 8,000 and he felt good about himself earning a bit of money. However, he did feel "unnerved", when his friends started graduating from college and got their first job, he said in the interview. He spoke about the societal stigma around a job which does not have an entry barrier.
Call centre jobs did not require a degree neither did they require expertise or proficiency of a certain kind. Though one can be earning ₹1 lakh per month at a call centre, but a doctor earning ₹25,000 per month gets more societal acceptance. So, when his classmates graduated and they started becoming doctors and engineers, it is then he started feeling a "little conscious", he admitted.
