Bombay Shaving Company founder Shantanu Deshpande on why he doesn’t own a house: ‘I’m paying ₹1.5 lakh rent’
Bombay Shaving Company founder Shantanu Deshpande explained why he doesn’t own a house.
Bombay Shaving Company founder Shantanu Deshpande said that he does not own the house and shared the reason for his decision in a recent podcast. In a conversation with Hyderabad-based real estate entrepreneur Ajitesh Korupulu, Shantanu Deshpande said that he lived in Gurugram where he paid a monthly rent of over ₹1.5 lakh.
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Ajitesh Korupulu said, “As an entrepreneur what’s happening is your asset is being built by a company. For somebody who’s a working professional, the real estate becomes the asset. Let’s say you’re paying a rent of maybe you know ₹1 lakh. You pay another ₹50,000-60,000 more you get a home. Even if you pay this rent for 10 years, you’re not creating any asset. Whereas you pay the EMI, you’re going to create an asset.”
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To this, Shantanu Deshpande responded, “The math doesn’t work for me that way. For example, and maybe this is a very Gurgaon thing, so maybe Hyderabad is different. Gurgaon, I’m paying ₹1.5 lakh in rent including maintenance [Rs] 1.6,1.65 [lakh] on Golf Course, premium place etc. The apartment I live in is roughly worth ₹7.5-8 crore. If I were to buy that apartment and I have to leverage let’s say 70% of it, ₹6 crore loan would be ₹6-7 lakh per month of EMI, which is like four times my rental cost. So, I’m living in a house which is like at 1/4th the EMI cost. So it makes no sense to buy.”
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He explained, “I would rather take that six lakh if I have it, if I’m earning it, I might as well put it into public markets and kind of build asset there as opposed to building a fixed asset where liquidity is very difficult. That’s the way I think about it unless I want to live there with my children and my parents are there and it’s a nice five bedroom, etc. and then you’re like okay fine now this is not an asset building activity, it is a cost.”
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