After initially rejecting the idea of purchasing a home in favor of renting, Zerodha co-founder Nikhil Kamath has now decided to buy a house.
In a recent episode of his podcast “WTF is with Nikhil Kamath,” he reignited the debate between buying and renting alongside guests Irfan Razack, Chairman & MD of Prestige Group, Nirupa Shankar, Executive Director at Brigade Group, and Karan Virwani, CEO of WeWork India.
Kamath, 37, known for his preference for renting, pointed out a key downside to renting: the uncertainty of when he might have to move out. “One disadvantage of renting is that you lack foresight on your move-out date. I had to leave my current place, even though I might have preferred to stay longer,” he explained.
When asked about whether buying a house could strengthen his finances, Kamath expressed his dislike for real estate’s illiquid nature. “I prefer assets like gold for liquidity. Real estate is illiquid and can lead to arbitrary pricing; if ten people decide to sell at once, the market can fluctuate wildly. In contrast, the stock market has more participants,” he noted.
Kamath also expressed frustration over paying stamp duty on property purchases, stating, “In the stock market, I can buy and sell without incurring a 5% to 6% stamp duty.”
The discussion turned to the profitability of buying versus renting property. Kamath remarked, “I don’t think anyone makes money from buying and renting. Occupancy for something like Airbnb isn’t guaranteed year-round, and considering inflation and interest rates, the returns are minimal.”
Nikhil Kamath, one of India’s youngest billionaires, has a net worth of $3.1 billion, according to Forbes.
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