Trends: Nikhil Kamath disclosed that he presently resides in a house that he does not own and intends to continue this living arrangement in the future.
In recent years, there has been a growing trend among prominent figures in various industries to opt for renting homes instead of purchasing, with increasing interest rates being one of the contributing factors.
Nikhil Kamath, the co-founder of Zerodha, has also echoed this sentiment, expressing a preference for renting a home rather than buying. He cited his reluctance to invest in real estate at current valuations, deeming them “ridiculous and retarded.” Kamath highlighted that, given the prevailing interest rates, the rising prices of homes and offices do not align with sensible investment decisions. He shared these views during CNBC TV-18’s “I Did it My Way” podcast in September.
Kamath further elaborated that he continues to reside in a house he doesn’t own and intends to maintain this living arrangement in the future. He explained that from an investment perspective, if he can earn a higher return on his money (10-12%) compared to the rental yield (3%) on homes in India, it doesn’t make financial sense for him to purchase a home. He emphasized the financial benefits of renting multiple apartments with the returns earned, stating that the rental yield is significantly lower than the capital deployed when buying a home.
In 2021, this trend of choosing to rent over buying was also observed among leading Bollywood personalities such as Madhuri Dixit and Kriti Sanon in Mumbai. Real estate brokers noted that celebrities prefer renting to maintain a specific lifestyle rather than committing to property ownership.