My experience I was in rented accommodation for 8 years 3+3+2 yrs at three different flats. Most problematic was shifting. I had no problem but I had to shift because owner wanted to sell it. Then I purchased the flat where I was in rent. Didn't have money for downpayment, so took 100% loan. Now my ~40% salary goes to EMI, a bit financially stressed. This is a 15 yrs old flat and after 20yrs loan period it's resell value will be nothing. But still I don't regret it. This is not an investment but I have bought peace of mind, I don't have to shift, my wife can hang a fancy wall clock wherever she wants, can install an AC and needn't take any permission to make an hole in the wall.
With every EMI you gain a little bit more equity and ownership of house. Thats a great peace of mind which money can literally buy )) But if you have extra income like bonus or some other gains in the next few years, consider repaying a substantial portion of the principal component of loan. Then your emi will reduce - and wishing you salary also increases a lot more, best
I beg to differ a little.. whatever you said is partially right. While calculating the return on home, it is important to understand that it does not matter how much appreciation you get on your property, you cannot leverage it until that property is for investment purpose and you are not residing there. If you are living there, it could give you 10X return and it still wont matter. And you will spend almost your entire youth under the burden of emi and fear of job loss. Solution: Buy a piece of land in a remote area where land prices are extreemly low and keep staying in a rented apartment. You have to pay 1/3rd of the emi of a flat. And you could still save some money. After 15-20 years, build the home and live happily after retirement.
To keep up with rising cost we are beginning to see the equity of our home for what it truly is, Its becoming hard for us seniors not to ask the obvious question: Should we cash in, invest the money, and rent?
Very true, people downplay planners role, until burnt by their mistakes. I remember just after my layoff early 2020 amidst covid outbreak, I needed to stay afloat, hence researched for license-fiduciary advsors.
Thankfully, I came across someone of practical knowledge, and decades of experience, I liquidated 200k of 325k from my 401(k) it has yielded nearly 1 m after subsequent investments so far.
LOREN LENA WALKER is the CFP responsible for my portfolio success, lady is in her 60s 0r 70s and has a private client base you can confirm her yourself on the internet, regulation an all.
@@PurvisTwiggs I did some findings on her, she really seem to know her stuff. educational background, qualifications was really impressive. Kudos and thanks for sharing. I left her a note and booked a consult.
One more thing people forget is that every year salary increases around 8-10%, which brings down the EMI-Salary %. After 10 years the EMI becomes very small compared to salary. Whereas the Salary-Rent % remains somewhat constant.
*Bought a home few years back with a emi of 24k. Constructed 2 shops in front with rental yield of 8000. Given the upper portion on rent on 4000. 50% of emi is coming from home itself. Your first property should be a house & second one would be commercial. Always calculate the return before buying 🙏*
I personally feel that buying and renting simultaneously is the right option. Buy where you estimate that the best capital appreciation can happen and rent where and how you might want to live. If someone is lucky, they might overlap and they will save a ton of transaction cost and gain significant freedom. The major benefit of splitting these into two is that the options of properties you can buy increases greatly. For ex - I prefer to stay near my current office, where capital appreciation might not be great but I can buy a flat in my home town where possibilities of capital appreciation are much better.
I really appreciate your work, but i saw few wrong assumptions in this video: 1] Rent will increase 6-7% every year, but EMI will be constant for 20 years. Reality: Rent may or may not increase every year. It may remain constant for couple of years as well (happened with my case). You can bargain the rent increase and in case it doesn't suit you, you always have the option to change your house. On the other side, in 2022, the bank has increased the home loan interest rates multiple times from 6.5-7% to 9-9.5%. So in this case your EMI might have increased 2-3 times in a single year. 2] Real estate capital appreciation is 10-12% Reality: Your house's capital appreciation depends on multiple factors. But on average, based on multiple research, Real estate capital appreciation is 3-5%.
Absolutely correct points stated . It is very easy to say emi thoda increase hota hai when int rates rises Reality is ppl who borrowed at 6.5% are finding it difficult to pay increased emi at 9% OR are witnessing their tenure go upto 80-85 years of age . Add to that uncertainty of economy and one will notice no job is safe . I’m not against buying or anything but making balderdash assumptions like 14% return in stocks and 12% in real estate will eventually justify anything u want to convey whixh is not a good approach . Buying and rent both have their own advantage and disadvantage . Each one should do their own due deligence and not base their decision on waht an influencer has to say
@@Maulana-Al-Bakrichod I agree with you . And if that’s what keeps him happy then it’s alright . But making a video with pie in the sky assumptions to justify buying is better is just plan dumb
@@Pedals_n_brews The way he acted in the beginning, made me think he will seriously show some facts. But his analysis was all fancy and not researched properly.
When someone says real estate don't consider flats in an apartment because after 20-25 years we start facing issues in buildings as it becomes old and its price won't increase unless and until it goes under redevelopment. If it dosent then it will become a liability for you and in most of the cases this happens. So think and invest.
20% down payment + we save tax on home loan interest and principal + purchase ready to move property and save on rent also + consider inflation in property value Suppose home loan is 40L for 15 yrs then repayment will be 71L (40L principal + 31L interest) tax saving will be 60k per year so for 15 yrs = 9L rent if take 15k per month so for 15 yrs = 25 L property inflation 5% so inflation after 15 yrs for 50L property = 37 L 9L + 25 L + 37L comes 71L == Repayment Loan amount If these conditions are present then purchasing home would be better decision than renting and investing
I have a 1.2 crore house but my tenant pays only 10k in Bhubaneswar. My father was a very saintly person who believed that he didn't keep tenants for his profit but to help them find a good home hence kept the rent low.
A house should always be bought but one thing to keep in mind is to buy a house within your income capacity. When you sell the house it will also return your money
Also deduct ~25K from your EMI expense while doing all these calculation because you are not going to live in road, anyway you need space to live in... Thanks for this detail video, this might have clear doubts for so many people
From where you got 11 percent returns. The problem in real estate is most returns happens beween 2 years before posession to next 4-5 years. After that you will stuggle to get even 5 percent return even after rental yield. So timing becomes very important in real estate.
YES ! People think just cz their house value increased, they can gain that money by selling it. Selling property is very Difficult. Its easier to buy new flats than second hand flats. Likeyou said, the timing of the sale matters. 1-2 years after purchase is crucial and probablt best time to sell it.
अगर घर अपने पुरखों से विरासत में मिला हो तो उनको अच्छी तरह से संभाल के रखना चाहिए अगर ऐसा मामला नहीं हैं तो फिर कमाई का कुछ हिस्सा निवेश करना चाहिए और घर भाड़े पेही लेना चाहिए। निवेश के मुनाफे से भाड़ा भरना चाहिए और वित्तीय रिटायर्ड से पहले घर अपना खरीद लेना चाहिए। 10/9
भाई प्रांजल जी 25 लाख का डाउन पेमेंट भी तो स्टॉक में रिटर्न के लिए इन्वेस्ट करेंगे ना और मेंटेनेंस भी तो इन्वेस्ट करेंगे ना तो वह भी 10 साल में ढाई करोड़ हो जाएगा थैंक्स भाई अगर बुरा ना लगे तो
Cost used to increase in last 70 years because only tier 1 cities were growing, people had lesser options to invest. But with the growth of satelite cities and other investment options peopl might not invest that much into properties. Also thing to note is that earlier inventory was less because of floor restriction. But now even tier 2 cities have 15 floor permission. Thane, a sub urb of Mumbai has 70 floor permission.
Thank you Pranjal! This video was really helpful for me as I had purchased my new home a year back, was going through the home loan documentation process, and each day after watching these so called financial influencer's opinions, I used to self-doubt my decision to buy real estate. This video gave me a lot of clarity.
There is two blunder in this video - 1) In the description it is assumed any person who is renting only going to rent the same house for next 20 years, which is totally wrong, because rent comes with other priorities of office location, school, etc. It never stays the same for 5+ years. 2) Every house value is appreciated by double in 10 years, but the reality is based on the P/E ratio, which comes to be - if a flat is 40L, then its easy to get up to 50 Lakh. (based on location)...but if the same flat comes in 80L, it never goes to 1 crore, even in Bangalore, also any property has a certain number of years after its value depreciates. So any flat which is old of 15 years old, you never going to buy with the same money amount- common sense.
One of the most important non capital, non money related reason is that once you buy a home you can't easily move to other location & maybe hamper your growth. That's why I always says that buying a home makes much more sense after 35+ age when you know that you won't be moving to other location just like that.
Few fools on insta are simply misguiding people by showing their biased opinion towards SIP, without considering a lot of important factors of both Homeloan & SIP. This video was perfect to clear the confusion. Thank you.
I've worked in the biggest real estate company in India and nobody has explained decision of buying real estate better. Leverage and emotional fulfillment are the top two reasons to consider buying a house
Hi All, I think one point we are missing here is, toady in 1 cr in Tier 1 cities you can only buy a 2 bhk 750 sq. ft. (carpet) home. If you think after earning 1-1.5 lakh per month you can survive in that home for 20 years then please go for it. However, today's generation want Quality life style, so to all the youngsters I will recommend to invest their money and do lot of saving. Also, you are saving taxes on HRA, which at one point I can bet will be more than Home loan tax saving. Few more points to add regarding Home: - Flats rate decrease after 10 years, so your property will not appreciate much after 10 years - As you progress in your career rent amount will become 5-10 % of your salary The only reason I will buy home is because after certain age I want to live in content.
This is called honesty today I feel why I follow your channel since 2020 This type of honest video we want .... Sir please continue your stock market series you have only uploaded 2 videos please sir upload more vide please sir please..... Thank you for great video prangal kamra sir ................
Aapne bhi purane video mein real estate ko khareedne se mana kiya tha...Shukr hai Aaj aap us cheez ko samajh pa rahe hain aur ek average indian ki savings mansikta ko samajh kar logically agree kar pa rahe hain...
If you have a good bunch of people around your rented place, It will make you feel home.. If your on flat's housing society people suck , You will feel like hell...it all depends on people around you.. Don't overstretch your buy/ rent budget..peace of mind is more important.
You have hit the cord about senior citizen members. Not only that they are not earning but the other aspect is about moving from one house to another because in Mumbai mostly the rented house is given for 11 months .. maximum 2 years. Longer duration is given only if the owner is in your relative (which is a rare case)
Nice video I live in metro city Noida Let me list some more minus points of buying a house 1. 70K Emi means your income should be 3 lakhs per month (if you give 25% of salary in emi) . This is not normal generally. 2. Loan will create burden on mind. Fear. 3. 20 - 25K emi mei Metro city mei 2 BHK bhi mushkil se ayega. 4. Liquidity gone if you invest in House and you spend like a kanjoos. 5. After 20 yrs house will be degraded and you want to buy a new house. 6. If you change your job location you can change your home location easily if you are on rent. 7. Flat appreciation is less.
@@rukshitkalvadia3695 han re vidwaan admi, tum apne khayali duniya mai jio. From your reply I can say either you haven't purchased a house or you don't have regards to money and time = you are rich
@@rukshitkalvadia3695 Mujhe kisiko explanation dene ka jarurat nahi. Jidhar aur jab dena thha maine de diya. Jo paisa and time ki kadar nahi karta mai uski kadar nahi karta. One of the Great Greek Authors, Euripides ne kaha hai - " Talk Sense To A Fool and He Calls You Foolish". Ab aagey aap samajhdaar ho. 🤣Jao jee lo apni jindagi! Aur idhar time khoti matt karo.
My opinion is built a good house in home town by spending 15-20 Lakhs then stay in rent at your working area. Once need a vacation comeback to hometown
I have stayed in rented house for many years but have bought a flat for my own. IT appreciated more than 50% in last 3 years but I don't track these. It gives safety and security to my family which is most important for me. Dil ke faisle dimag se nahi liye jaate. Also living in your own house makes you stress free and happy which increase your productivity. Never buy flats for short term based on your current purchasing power and try to sell and move to better flat in future. Buy once and for long term.
In Lucknow the real estate market is unnecessarily expensive and the worst part is the rent is lower and there are no software jobs. I don't understand why know one talks about it. Here buying a house of 2000 square feet house generally costs between 1.35 cr to 2.5cr and the average rent is 10000 to 15000 per month. If we even calculate rental yield it turns out to be 1 to 1.5% which is pathetic.
Superb way to explain what makes sense in few variables that no one considers - Rent appreciation yoy vs fixed loan payout, returns of money saved may not be sufficient to cover the cost of house in later years.
With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly-which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $125k bond/stock portfolio
one of the best content on rent vs buy i came across , very clear on the point and looking at both perspective !!! Truely we live in the house each n every day of our lives ( more imp after pandemic / wfh ) we basically get emotionally attached with house .
Balanced video. Somewhat convincing. But not entirely.. I live in a flat which costed 84 lakhs in 2015, now it still costs 85 lakh in 2023! Also, rent increase itself is to beat inflation. So technically the intrinsic value of rent remains the same. 20k rent today is of same value of 1 lakh 15 years down the line!
Excellent and logically presented. Nowadays a decent apartment rent in Tier A city within 10-15km of office radius will be around 35k minimum including maintenance and water connections. And it will increase every year by 7% on an average. Plus shifting cost since no one stays in rent in a single apartment for 10 to 20 yrs. Eventually we will end up paying someone else the same amount of money in which we could have owner a decent apartment as per our own financial capacity. Staying in a 5 cr apartment and paying 1 lakh rent doesnt make sense, rather buy something which we can afford without burning our pockets.
Awesome analysis... However, flats in metro doesn't seem to be giving 10% / annum growth.. even if u wait 10 yrs. Hardly, you will find 1 Cr flat will become 2 Cr. In 7 yrs!
In my view buying is anytime better than renting. If property is good it is like FD which you can encash anytime even though it may take some time for you to sell it but it will surely sell one day and give you good returns. In renting you are not losing your money cash immediately.
Rent or Buy = Same. I have seen people with own house who does following things... 1. Sell their house for their sister's, daughter's marriage. 2. Some don't even enjoy own house like my friend has 400 square yard house in India and he can't enjoy his own house as he works in gulf and pay rent in foreign land hahaha 3. Some sell own house to deal with some big surgery costs. 4. Some sell it to divide a portion between their children. 5. Some have own house in Old cities and they prefer to pay rent and stay in new cities. 6. Living life like a miser. They just own house and live beggar lifestyle and are mean to people who don't have own house. Nothing is permanent!
sir you are the eye opener, I also influenced with rent policy rather opting home loan and oppose as well people who trying to purchase home with home loans
I think buying a house at a very young age is stupid, cause you don't know how big a house would you actually need and how lavish would you want it to be down the line. In my opinion, one should buy a house at around 35-40. By this time I think your career starts to stabilize a lot too.
For a person getting new job & early income... It is always advisable to put 80% income in Stocks... *Buy 5 dividend stocks... And 5 growth stocks...bus nothing else* ... Reinvest in them from their dividends. at least for next 5yrs... After that he can buy house... He will not NEED to invest in Stocks from his salary income FOR HIS LIFETIME.... He just has to reinvest his dividends.
Really appreciate you for this video, I got it so wrong earlier and when I realised this 1-2 year back, It was shocking and contrary to what many people were saying . also it is much more nuanced rents increase, salaries increase, people finish it early, leverage, economic activity etc. and you explained it well with simplicity at core.
@pranjal kamra after watching this video got my biggest confusion of buying or doing Mutual fund solved perfectly. By balancing both I did right decision and bought my dream home last year. No one can explain complex financial concepts so easily other than you....thanks a lot .
Dude this is one video that everyone should watch. Especially the ones who get swayed by Sharan or Warikoo or whoever. We are lucky that we have someone like you who’s breaking the myths of attractive (but highly stupid) ideas proposed by other finfluencers.
बहुत बड़िया समझाया आपने, मैंने 3 दिन पहले ही एक वीडियो देख कर अपने भाई से बोल रहा था "पापा ने लोन में घर लेकर बहुत ही बुरा डिसीजन लिया है, इसकी emi पे करने के कारण हम लोग अपने आप को कभी ग्रो नही कर पाएंगे, हमारी जवानी कर्जे में ही डूब जायेगी" लेकिन अब मेरी सोच दोनों साइड को सही तरीके से calculate रही है, धन्यवाद आपका❤से 🙏
At the end of the day, it is found that listening and following the age old advices that we grow up hearing in our households from our elders was actually sensible. Holds true for finances as well as health and anything. Bade buzurgo ki suno. Fayda hi fayda. Hamesha maths aur science nahi dhundhna chahiye unki baaton m😊
Renting and buying both have advantage and disadvantage. I agree most video show only one part but you are also doing same. Who will live in rent in 20 year old house. Also renting is also staregtic you can move your choice of locality and apartment for few year, plus you dont have liabilty to stay at same place your whole life, think from rapidly changing tech park always coming to new areas. Buying a house gives a peace of mind. It depend you want peace or growth in life. At early stage of life without any doubt renting is good.
One thing you are missing I think..the value of house goes up by 10% p.a and become double in 7 years. But actually, if I want to sell my house then I may not get the double price since my house is 10 years old and there will be depreciation. The double value is paid by customer only for a similar new house and not a 10 year old house.
no, People are also interested in Resale flats. Because they get bigger carpet area as compared to new matchbox sized homes. If you bought flat in good location then dont worry it wont depreciate.
People are interested in resale because they are available at cheaper rates than newer ones, so appreciation is on the new properties and not the older ones
@pranjalkamra you forgot to consider some aspects. First 15 years back I took 2BHK @ 13K rent, now 2BHK @26K not one lakh 1 Lakh rental after 20 years will depend on salary which don't seems to increase. So it cut down your point then you have to pay 1 Lakh. Now secondly, you shared real estate appreciation as 10% CAGR. But actually its near 6% CAGR. So 1 crore flat will not be 2.5 crore. Again if salary don't increase then it will never go out of reach. In rental also income tax saving happens. At retirement, you need not to live in so expensive city where flat costs 2.5 crore. You can easily take flat at 30-35 Lakh. Your PF itself will be like that. You somewhere mentioned 12% return on real estate? Wonder which logic is used.? Mumbai 6.7% CAGR, Delhi 5.25% CAGR. Don't consider tier 2,tier 3 cities. Flat rate is not 1 crore! So there is huge difference in data and calculations. Also you haven't considered what will happen if 20 years 70K EMI and my job is private and like today recession happen. Seems its biased towards your inclination on real estate.
I bought plot in 2016 for 32 lakhs sold for 1 crore 6 months back, than i bought 1000 sqyards in outskirts im 4 months price increased to 1.35 crore, the thing is real estate is the safest investment and stock market 90% people loose money
Lyf ka important part tha mere liy jo clear Kiya bhai. Mene real estate main kuch investment kiya pr lga glat kiya. Aaj apne sb issue error jo mind m the clear kr diye thnx to uh bhai
what is completed here in this video ? you focused on buying a house. ( if everyone is going to the right then go left) conclusion : Buying or renting is totally depends upon the person who is earning and can assume his future so time and conditions will let you know when to do what. Hypothetical Story : One of my friends buy a house and after 5 - 6 years his company wants him to relocate to some other location now he is paying EMIs and rent both.
@@rahima-hi7gu Renting house that you have bought for yourself is not an easy option. you always kept on thinking they are using your things. There are other type of people who bought house for renting they are not emotionally connected to that house. Hope you find my perspective valid 😊.
One Should also research well before buying property then return might better than 10% in that case. Also, taking Home loan keep your financial discipline in place as you cant skip Emi 😊
One thing more . The risk taking capacity is lost when you take large amounts of loan for your home .You bound to pay large EMI’s .Your thoughts get restricted because of fear .you may have new businesses idea but not money . So Agar option hai thoda rukne ka to ruk jao . Aur pahle business m invest karo. Ghar to ban hee jayega pahle se bada aur behtar
Hi Pranjal, pls make similar video on buying second home / investment home v/s invest equivalent money in different mode of avenues. My wife is building pressure on me to go for a second home for investment purposes by getting peer pressure.
Residential real estate works in cycles. Just like anything else. It is not a guarentee that housing rates will keep on increasing. 10% p.a. Is a mis interpretation of data. It works based on demographics and location. Currently Mumbai real estate rates are sky high but with the building out of infrastructure. Commute time is expected to reduce drastically in this case real estate will flat line. Not to mention many areas get capped. Old buildings as the building depreciates after a certain age also tend to lose value. So there isn’t anything certain about value appreciation in real estate buildings. Building life cycle determines the value of the building. After a certain age (since his calculations extend to 20 - 30 years) … you have to factor in depreciation / leakages / society issues etc etc . As a tenant if you are suffering from a bad society you can just leave. Secondly in 20 years your requirement plus income status will entirely change. You might have more family members might need a bigger home / smaller home if your kids have gone abroad for studies. With the home you buy you are locked in to whatever size home you have. Thirdly he hasn’t added the concept of tax and stamp duty to the equation at all. Buying a flat under construction attracts a 5% GST and a 5 % Stamp Duty. Unfortunately I think Pranjal has been motivated by biased parties to convince his audiences to buy a home
Real estate Property value - 1,00,00,000 Stamp duty, registration - 7,00,000 Broker (if any) - 1,00,000 Basic Furniture/fixtures - 7,00,000 Total cost - 1,15,00,000 Down Payment - 35,00,000 Loan - 80,00,000 EMI - 72,000 p.m. for 20 years Rent - 25,000 Annual Rent - 3,00,000 Broker (if any) - 25,000 Society Maintenance - 60,000 House Maintenance (if any) - 50000 Property Tax - 5000 Major Building Maintenance (if any) - 10,000 Total expenses - 1,50,000 EMI 72000 -Rent 12000 +Opportunity cost of down payment - 17000 (6%) Net outflow - 77000 The house value should increase by 77000 every month for the next 20 years If this doesn't happen, you will not break even Why does property look like a better investment?
Interest rates goes up mostly. Slightest increase without corresponding increase in emi would elongate the loan tenure. Secondly logic of capital appreciation may not really apply to flats comparing to an individual standalone house
I think you forgot one point of down payment, the 20% Down payment will also grow ~12-15% rate and 45K savings will go around ~12-15% rate so, if the cost of house 1Cr becomes 2.5 Cr after 20 Years still it can be bought before 20 years (If Only consider the financial angle). Also another angle for employees who change their job to different locations for them its good to go for rent, and buying Home would be for them who decided to live in the same place for a long time(min 20Yrs).
I bought 2bhk flat in Gurgaon 5 years back and now I am loan free. I would recommend everyone to purchase house, rented house will never give you peace of mind.
This is simply awesome.. Thank you for the eye opening.. U have changed my entire perspective, I was so influenced by these influencers and staying on rent since ages... Thank you once again
Ghar kharidoge toh 1. khud ka thoda financial pressure hoga jarur, but future generations will have it easier. 2. Marzi se reh paogey 3. Har 5 saal baad dhundna nahi padega ghar. 4. paise toh ayenge jayenge, acha ghar bana liya toh RENT bhi de paogey
Hi Pranjal sir I always gain some extra knowledge watching your videos and started investing in stock because of you and getting more than average returns so thanks a lot for that . The one thing that most of the people miss on about home loan ( sorry to say but you also haven't given any clarification on that ) is getting defaulted on that loan amount as we can't predict our life for the next 20yrs of span for job security which we all learned from the covied situation and the SARFAESI act due to which will not just lose the capital invested but that beloved property as well so due to that I think that equity market has an edge in that matter with the help of stop loss n other tools we can have the entire control on the capital invested and as well as the liquidity benifit along with it as compared to the property with an home loan . This was just my perspective thought of letting you know . Once again thanks for spreading knowledge with each new video of yours. You will always be my guru in terms of financial knowledge.
I paid total of 65L after 12yrs on a loan of 30L.. So i literally paid double on a property... And now after 13yrs the value of property is 60L... The plus point is i hav earned a property for our old age n for our kids So it is still debatable topic.. Only corrupt or politicians can make profit on a property... Corrupt by giving cash and politicals by knowing the prior information on the property
Over generalization, house is a depreciating asset where as land is appreciating so if the rate of appreciation is more than depreciation price will increase at a rate that beats inflation. Now the catch here is that its very hard to predict at what rate the prices of land appreciates in an area as it depends on multiple factors. Whereas over long run its comparatively easier to predict the rate of return of an market instrument.
Bank ka bhi EMI bahut badh jata hai jab intrest rate hike hote hai. Mere relative ne 30 lakh ka loan liya 8saal tak EMI 30000 se bhara sab intrest me gaya sirf 2lakh principal paid hua Aur ab bank ne new rate se remaining principal reschedule kar ke remaining 22 saal wala loan ke liye 32 saal ka extended kar diya mean 25 saal wala loan total 38 saal ka ho gaya 2nd side real me appreciate nahi hua Unka 44 lakh ka ghar aaj bhi 8 saal ke baad 48 me buyer nahi mil rahe Same purchased value hi mil raha hai ab esa lag raha hai ke rent pe rahete to achha hota 4X compare to rent cost suffering kiya aur haath me bhi kuch nahi aaya It's cost within 8 year are 50lakhs lossed due to bought home by NBFC loan Aur kyu ki bank se compliance me fit nahi ho rahe the NBFC se loan liya tha jo wese hi 3% jyada the Aur ab bhi same situation he. Same experience 1994 se 2001 me ek relatives ko hua Please re revue your view also. It too not correct. Aur actually bank wale jubardusti insurance, processing fees, valuation charges lagate he to wese hi average 2% intrest cost average me badh jate hai
Real estate appreciation is not more than 5 to 6% on an average. If you could share the reference if its up to 10% it will be appreciated 🙏 its possible in only metro cities and not in second or thrid cities. Please clarify so that it will help to many of your viewer's . Thanks 🙏😊
Buy is my answer reason 1 . after retire paying rent is very difficult 2. you have peace of mind if you own a house , for every small change you have to beg your owner 3. for big changes like taking ac connection , proper painting of wall is not possible as per rent
It is best to save in SIP for 10 years and have 1 cr then may be you won't get the exact house or flat you wanted 10 years back but there will certainly be many flats available in 1 cr in other localities and hence the hard earned money will not go in interest payment. Or even if one take a housing loan after accumulating networth of 1 Cr invested in mutual fund it will give manifold return in future. If one take a housing loan at initial stage of job it will be difficult to have a decent amount for retirement so my rule is for a 30 years of job save initial 10 years for in mutual fund and leave the saved amout invested up to next 20 years . After 10 years when one can have decent salary go for housing loan and purchase a house/flat and pay EMIs in most of the cases one will still have some amount left for investment after EMI payment which will help them in in higher education of children.
Two points.. Why Anyone take home on rent for 20years,he is always free to change home atleast two years after he can move , Second property will also increased by its price after every years so rent will be same of its price according you 3%. A.person who take loan he is loaner not owner ,he cannot sell his own home untill loan payment is not completed.... So still question is remain what ia better rent or owned a home 😮
Moved to a metro city and started my carrier. Then bought a flat thinking of settling down. Lost job and got an offer in another city where I moved. The newly bought flat was rented out. In course of time, job took be to different cities.... home and abroad & everywhere I had to live on rent. Steadily maintaining my own flat became a nightmare as I had to rely on a local broker who would never leave excuses to ask money for paint, repair, commission, etc. and my rental yield was just a peanut. Pandemic made the situation worst. Eventually I sold it out almost at the same price I bought 10 years earlier. Lesson : Never invest on a Flat for rental yield if you are not in the same city, if you have to use bank loan and if the location is almost prime. I have seen many lucky fellows when property appreciated and investment became a boon but there are people like me whose story is otherwise. Buy the way, I have my ancestral home once I am back to pavilion.
I doubt if RE will grow at 10% and rents at 8% in India considering the excessive supply that exist. It'll depend on state to state and city to city. You also say in the end that flats will not appreciate too much into the future. Most people who are on the side of renting instead of buying want to buy flats in future instead of an individual house. Since flat prices won't go up much as you say, finally the renters will have the last laugh as they'll be able to buy a good and affordable flat with their saved capital.
@@tanujsingh9182 I'm talking about the renters who want to buy flat. As Pranjal himself is saying that flats won't appreciate that much, it's obvious that renters will be able to beat the price of flats in future. Already we're seeing empty flats in cities.
Honost Observations 👇👇 I rented a 3 bhk in 2019 rent 8500/- but if I brought the Property it would cost me 35 Lakhs registration interiors Saab Mila k 47 lakhs , Down payment 10,00,000 emi 21000 - 24000/- Now I pay 10500/- rent same property and it's selling at 45 lakhs non furnished. Registration + interiors 57-59 lakhs. So for an investment I brought a 1 bhk for 18,00,000 , I put it up on rent for 6000/- emi is 13000-15000/- @8% The rent increase every year @10% After 10 years the rent would be 15562/- and in 20 years it would be 40,000/-
I bought the house 7 years back and now am loan free and blessed ! Home is important
1 bhk?
That’s because you are lucky
Kitna kamate ho bhai?
3bhk... Let both partners earn and enjoy life... Come out of traditional Indian couple concept where only husband will work...
@@amreshhalder5056 1 lakh per month is minimum limit to live properly in a tier 1 city...
My experience
I was in rented accommodation for 8 years 3+3+2 yrs at three different flats. Most problematic was shifting. I had no problem but I had to shift because owner wanted to sell it. Then I purchased the flat where I was in rent. Didn't have money for downpayment, so took 100% loan. Now my ~40% salary goes to EMI, a bit financially stressed. This is a 15 yrs old flat and after 20yrs loan period it's resell value will be nothing. But still I don't regret it. This is not an investment but I have bought peace of mind, I don't have to shift, my wife can hang a fancy wall clock wherever she wants, can install an AC and needn't take any permission to make an hole in the wall.
Well said.
Even then after apartment will go for redevelopment, will give you returns..
Can you let me know how you took 100% loan? I thought you need 20% down payment.
Great video sir
With every EMI you gain a little bit more equity and ownership of house. Thats a great peace of mind which money can literally buy ))
But if you have extra income like bonus or some other gains in the next few years, consider repaying a substantial portion of the principal component of loan. Then your emi will reduce - and wishing you salary also increases a lot more, best
I beg to differ a little.. whatever you said is partially right. While calculating the return on home, it is important to understand that it does not matter how much appreciation you get on your property, you cannot leverage it until that property is for investment purpose and you are not residing there.
If you are living there, it could give you 10X return and it still wont matter. And you will spend almost your entire youth under the burden of emi and fear of job loss.
Solution: Buy a piece of land in a remote area where land prices are extreemly low and keep staying in a rented apartment. You have to pay 1/3rd of the emi of a flat. And you could still save some money. After 15-20 years, build the home and live happily after retirement.
To keep up with rising cost we are beginning to see the equity of our home for what it truly is, Its becoming hard for us seniors not to ask the obvious question: Should we cash in, invest the money, and rent?
Very true, people downplay planners role, until burnt by their mistakes. I remember just after my layoff early 2020 amidst covid outbreak, I needed to stay afloat, hence researched for license-fiduciary advsors.
Thankfully, I came across someone of practical knowledge, and decades of experience, I liquidated 200k of 325k from my 401(k) it has yielded nearly 1 m after subsequent investments so far.
@Purvis can I get a referral pls?
LOREN LENA WALKER is the CFP responsible for my portfolio success, lady is in her 60s 0r 70s and has a private client base you can confirm her yourself on the internet, regulation an all.
@@PurvisTwiggs I did some findings on her, she really seem to know her stuff. educational background, qualifications was really impressive. Kudos and thanks for sharing. I left her a note and booked a consult.
One more thing people forget is that every year salary increases around 8-10%, which brings down the EMI-Salary %. After 10 years the EMI becomes very small compared to salary. Whereas the Salary-Rent % remains somewhat constant.
Increase 8-10% a year? Which company is this?
Really?? Your company gives 10% hike every year?? Can you please name it?
Apple
And u forgot to mention
Every year repo rate is getting increased in same way
Within an 1.5 year it is 9% from 6.5 % * approx....
@@harshadfadadu9269lmfao repo rate goes down too
*Bought a home few years back with a emi of 24k. Constructed 2 shops in front with rental yield of 8000. Given the upper portion on rent on 4000. 50% of emi is coming from home itself. Your first property should be a house & second one would be commercial. Always calculate the return before buying 🙏*
Good luck with the future brother
@naturallyweird661 Thanks 🙏
I personally feel that buying and renting simultaneously is the right option. Buy where you estimate that the best capital appreciation can happen and rent where and how you might want to live. If someone is lucky, they might overlap and they will save a ton of transaction cost and gain significant freedom.
The major benefit of splitting these into two is that the options of properties you can buy increases greatly. For ex - I prefer to stay near my current office, where capital appreciation might not be great but I can buy a flat in my home town where possibilities of capital appreciation are much better.
I really appreciate your work, but i saw few wrong assumptions in this video:
1] Rent will increase 6-7% every year, but EMI will be constant for 20 years.
Reality: Rent may or may not increase every year. It may remain constant for couple of years as well (happened with my case). You can bargain the rent increase and in case it doesn't suit you, you always have the option to change your house. On the other side, in 2022, the bank has increased the home loan interest rates multiple times from 6.5-7% to 9-9.5%. So in this case your EMI might have increased 2-3 times in a single year.
2] Real estate capital appreciation is 10-12%
Reality: Your house's capital appreciation depends on multiple factors. But on average, based on multiple research, Real estate capital appreciation is 3-5%.
Pranjal has used this video to pacify and justify his deed of purchasing the house.
Absolutely correct points stated . It is very easy to say emi thoda increase hota hai when int rates rises
Reality is ppl who borrowed at 6.5% are finding it difficult to pay increased emi at 9% OR are witnessing their tenure go upto 80-85 years of age . Add to that uncertainty of economy and one will notice no job is safe .
I’m not against buying or anything but making balderdash assumptions like 14% return in stocks and 12% in real estate will eventually justify anything u want to convey whixh is not a good approach . Buying and rent both have their own advantage and disadvantage . Each one should do their own due deligence and not base their decision on waht an influencer has to say
@@Maulana-Al-Bakrichod I agree with you . And if that’s what keeps him happy then it’s alright . But making a video with pie in the sky assumptions to justify buying is better is just plan dumb
@@Pedals_n_brews The way he acted in the beginning, made me think he will seriously show some facts. But his analysis was all fancy and not researched properly.
When someone says real estate don't consider flats in an apartment because after 20-25 years we start facing issues in buildings as it becomes old and its price won't increase unless and until it goes under redevelopment. If it dosent then it will become a liability for you and in most of the cases this happens. So think and invest.
20% down payment +
we save tax on home loan interest and principal +
purchase ready to move property and save on rent also +
consider inflation in property value
Suppose home loan is 40L for 15 yrs
then repayment will be 71L (40L principal + 31L interest)
tax saving will be 60k per year so for 15 yrs = 9L
rent if take 15k per month so for 15 yrs = 25 L
property inflation 5% so inflation after 15 yrs for 50L property = 37 L
9L + 25 L + 37L comes 71L == Repayment Loan amount
If these conditions are present then purchasing home would be better decision than renting and investing
Correct calculations
I live in a rented house, which cost around 1 cr, and I pay 10 k per month. I think it is better to pay rent we get this kind of cool deals😊
10k rent for 1 crore house? Where?
@@arshsingal65 Hyderabad, gated community , independent villa, near ECIL
I have a 1.2 crore house but my tenant pays only 10k in Bhubaneswar. My father was a very saintly person who believed that he didn't keep tenants for his profit but to help them find a good home hence kept the rent low.
Rent/Buy depends on your life partner ❤
Stay single 💪🏼
@@yeeeeeyy Kab tak single rahega .virgin hi Marege kya 🤣
@@yeeeeeyy everyone says this until they fall for someone lol
@@yeeeeeyy Kuch saal aur, then you will also feel the importance of your partner ❤️
@@parijatttt.exe. this shows that you are very weak and fall easily for someone
A house should always be bought but one thing to keep in mind is to buy a house within your income capacity. When you sell the house it will also return your money
Also deduct ~25K from your EMI expense while doing all these calculation because you are not going to live in road, anyway you need space to live in...
Thanks for this detail video, this might have clear doubts for so many people
From where you got 11 percent returns. The problem in real estate is most returns happens beween 2 years before posession to next 4-5 years. After that you will stuggle to get even 5 percent return even after rental yield. So timing becomes very important in real estate.
YES ! People think just cz their house value increased, they can gain that money by selling it. Selling property is very Difficult. Its easier to buy new flats than second hand flats. Likeyou said, the timing of the sale matters. 1-2 years after purchase is crucial and probablt best time to sell it.
अगर घर अपने पुरखों से विरासत में मिला हो तो उनको अच्छी तरह से संभाल के रखना चाहिए अगर ऐसा मामला नहीं हैं तो फिर कमाई का कुछ हिस्सा निवेश करना चाहिए और घर भाड़े पेही लेना चाहिए।
निवेश के मुनाफे से भाड़ा भरना चाहिए और वित्तीय रिटायर्ड से पहले घर अपना खरीद लेना चाहिए। 10/9
I have never seen person as much as true as you are sir . I can't explain in word how much you are helping people's lives ❤
Fax 💯
Kuch nai bhai .. pehle isne bhi stock lo...rent pe raho bola hai...ab gulati marlia....
Although I respect him, but sach se nazare nahi ferni chaiye
भाई प्रांजल जी 25 लाख का डाउन पेमेंट भी तो स्टॉक में रिटर्न के लिए इन्वेस्ट करेंगे ना और मेंटेनेंस भी तो इन्वेस्ट करेंगे ना तो वह भी 10 साल में ढाई करोड़ हो जाएगा थैंक्स भाई अगर बुरा ना लगे तो
Sorry guys but this video is copycat of Mr Amit Sangwan video...just see his videos you will forget all influencers
@@ashishchaturvedi5041 bhai to 25 lakh downpayment wala Ghar bhi to 10 saal bad rate me double hojaega...2.5cr jo aj h uska 1/3 rahega 10 saal me
Perfect video 👍🏻
Totally agree
Arre sir sir sir aap bhi pranjal kamra ki videos dekhte hai 😂
Nakli comment koe paisa nahi Dene wala 🤣🤣👍
Honesty and Simplicity is a new "cool" bcoz of you Pranjal😊
Cost used to increase in last 70 years because only tier 1 cities were growing, people had lesser options to invest. But with the growth of satelite cities and other investment options peopl might not invest that much into properties.
Also thing to note is that earlier inventory was less because of floor restriction. But now even tier 2 cities have 15 floor permission. Thane, a sub urb of Mumbai has 70 floor permission.
Thank you Pranjal! This video was really helpful for me as I had purchased my new home a year back, was going through the home loan documentation process, and each day after watching these so called financial influencer's opinions, I used to self-doubt my decision to buy real estate. This video gave me a lot of clarity.
Same..I also used to second guess my decision of buy a house because of these fin influencers
@@engineerexpress1955ye bhi influencer he hai lol . Don’t live in echo chamber
There is two blunder in this video - 1) In the description it is assumed any person who is renting only going to rent the same house for next 20 years, which is totally wrong, because rent comes with other priorities of office location, school, etc. It never stays the same for 5+ years. 2) Every house value is appreciated by double in 10 years, but the reality is based on the P/E ratio, which comes to be - if a flat is 40L, then its easy to get up to 50 Lakh. (based on location)...but if the same flat comes in 80L, it never goes to 1 crore, even in Bangalore, also any property has a certain number of years after its value depreciates. So any flat which is old of 15 years old, you never going to buy with the same money amount- common sense.
One of the most important non capital, non money related reason is that once you buy a home you can't easily move to other location & maybe hamper your growth. That's why I always says that buying a home makes much more sense after 35+ age when you know that you won't be moving to other location just like that.
You can always rent your property & move anywhere in the world. With this rental income you can pay the rent wherever you are ☺️
Few fools on insta are simply misguiding people by showing their biased opinion towards SIP, without considering a lot of important factors of both Homeloan & SIP.
This video was perfect to clear the confusion. Thank you.
I've worked in the biggest real estate company in India and nobody has explained decision of buying real estate better. Leverage and emotional fulfillment are the top two reasons to consider buying a house
Kyuki tu chu**.hai isliye tuje samjh nahi aaya😂😂😂😁😁😁😊😊😊😊
Hi All,
I think one point we are missing here is, toady in 1 cr in Tier 1 cities you can only buy a 2 bhk 750 sq. ft. (carpet) home. If you think after earning 1-1.5 lakh per month you can survive in that home for 20 years then please go for it. However, today's generation want Quality life style, so to all the youngsters I will recommend to invest their money and do lot of saving. Also, you are saving taxes on HRA, which at one point I can bet will be more than Home loan tax saving.
Few more points to add regarding Home:
- Flats rate decrease after 10 years, so your property will not appreciate much after 10 years
- As you progress in your career rent amount will become 5-10 % of your salary
The only reason I will buy home is because after certain age I want to live in content.
Nice advice
This is called honesty today I feel why I follow your channel since 2020 This type of honest video we want ....
Sir please continue your stock market series you have only uploaded 2 videos please sir upload more vide please sir please.....
Thank you for great video prangal kamra sir ................
Aapne bhi purane video mein real estate ko khareedne se mana kiya tha...Shukr hai Aaj aap us cheez ko samajh pa rahe hain aur ek average indian ki savings mansikta ko samajh kar logically agree kar pa rahe hain...
रियल एस्टेट एक ऐसा ऐसेट क्लास है जिसको आप रोज जीते हो ।।
बहुत ही सुंदर लाइन ❤
If you have a good bunch of people around your rented place, It will make you feel home.. If your on flat's housing society people suck , You will feel like hell...it all depends on people around you.. Don't overstretch your buy/ rent budget..peace of mind is more important.
💯
You have hit the cord about senior citizen members. Not only that they are not earning but the other aspect is about moving from one house to another because in Mumbai mostly the rented house is given for 11 months .. maximum 2 years. Longer duration is given only if the owner is in your relative (which is a rare case)
Nice video
I live in metro city Noida
Let me list some more minus points of buying a house
1. 70K Emi means your income should be 3 lakhs per month (if you give 25% of salary in emi) . This is not normal generally.
2. Loan will create burden on mind. Fear.
3. 20 - 25K emi mei Metro city mei 2 BHK bhi mushkil se ayega.
4. Liquidity gone if you invest in House and you spend like a kanjoos.
5. After 20 yrs house will be degraded and you want to buy a new house.
6. If you change your job location you can change your home location easily if you are on rent.
7. Flat appreciation is less.
Pranjal Sir ne yeh sab cover nahi kiya becuase he wanted to pacify his own mind for buying the new house :P
Bhai Pranjal hero banta hai. Isko khud thikse kuch nhn pata.
@@rukshitkalvadia3695 kya admi hai re tum! Pata nahi yeh reply sarcastic thha ya you were serious!
@@rukshitkalvadia3695 han re vidwaan admi, tum apne khayali duniya mai jio. From your reply I can say either you haven't purchased a house or you don't have regards to money and time = you are rich
@@rukshitkalvadia3695 Mujhe kisiko explanation dene ka jarurat nahi. Jidhar aur jab dena thha maine de diya. Jo paisa and time ki kadar nahi karta mai uski kadar nahi karta. One of the Great Greek Authors, Euripides ne kaha hai - " Talk Sense To A Fool and He Calls You Foolish". Ab aagey aap samajhdaar ho. 🤣Jao jee lo apni jindagi! Aur idhar time khoti matt karo.
Mr Pranjal, this is wonderful study you made on this issue, let's make another one in buying a Car vs Renting.
My opinion is built a good house in home town by spending 15-20 Lakhs then stay in rent at your working area. Once need a vacation comeback to hometown
Yes, this is the best option atleast in present time.
Thank God, I have my own 2 bhk in boriwali side (10 years emi pending n good raw house in my farm at native place ( importance lockdown ma samj aya )
My dad had bought a house for 4.5 lac in 2004 when i was born and today it's price is more than 35-40 lac. I belive in real estate
That means 11% returns 🎉
@@vaibhavrayewar9159 exactly.
@@vaibhavrayewar9159 i bought house in 2014 at 12 lakh and sell @ 8.5 lakh in 2022 😢😢😢 700+ people's in aur colony sale at hugg loss
@@stayhealthy9125here in my town property value has increased 400-500% within the same period 😮
@@stayhealthy9125 location
I have stayed in rented house for many years but have bought a flat for my own. IT appreciated more than 50% in last 3 years but I don't track these. It gives safety and security to my family which is most important for me. Dil ke faisle dimag se nahi liye jaate. Also living in your own house makes you stress free and happy which increase your productivity. Never buy flats for short term based on your current purchasing power and try to sell and move to better flat in future. Buy once and for long term.
In Lucknow the real estate market is unnecessarily expensive and the worst part is the rent is lower and there are no software jobs. I don't understand why know one talks about it.
Here buying a house of 2000 square feet house generally costs between 1.35 cr to 2.5cr and the average rent is 10000 to 15000 per month. If we even calculate rental yield it turns out to be 1 to 1.5% which is pathetic.
There are generally 3 floors, so if you multiply the rent by 2.5 then it becomes 3% only
Superb way to explain what makes sense in few variables that no one considers - Rent appreciation yoy vs fixed loan payout, returns of money saved may not be sufficient to cover the cost of house in later years.
I had doubts. Now I've none. Thank you so much. This is the best video out there on Rent vs Buy...
Hii sir ap mera bhi short dekhiye aur bataiye knowledge kaise hai 🙏
Did you buy ?
With markets tumbling, inflation soaring, the Fed imposing large interest-rate hike, while treasury yields are rising rapidly-which means more red ink for portfolios this quarter. How can I profit from the current volatile market, I'm still at a crossroads deciding if to liquidate my $125k bond/stock portfolio
Would you mind recommending a specialist with a variety of investment options? This is extremely rare, and I eagerly await your response.
Yuval Eric Brokman..
search his full name.
I looked him up, and his credentials and resume are excellent, so I can see why he's booked up. Nonetheless, I scheduled a consultation with him
@@user-dl4rr5qs8y Thanks for sharing,found him on the internet.
one of the best content on rent vs buy i came across , very clear on the point and looking at both perspective !!! Truely we live in the house each n every day of our lives ( more imp after pandemic / wfh ) we basically get emotionally attached with house .
Balanced video. Somewhat convincing. But not entirely.. I live in a flat which costed 84 lakhs in 2015, now it still costs 85 lakh in 2023!
Also, rent increase itself is to beat inflation. So technically the intrinsic value of rent remains the same. 20k rent today is of same value of 1 lakh 15 years down the line!
Aisa Googly sawaal poochna allowed nahi hai
Bhai main bhi 2014 mein 12 lakh ka new ghar liya tha aur 2022 mein 8.5 lakh ka becha 😞😞😞😢😢😢
Watching for the first time, coming from Sharan Hegde’s book.
Great content! Not bullshit. Just clear information.
Excellent and logically presented. Nowadays a decent apartment rent in Tier A city within 10-15km of office radius will be around 35k minimum including maintenance and water connections. And it will increase every year by 7% on an average. Plus shifting cost since no one stays in rent in a single apartment for 10 to 20 yrs. Eventually we will end up paying someone else the same amount of money in which we could have owner a decent apartment as per our own financial capacity. Staying in a 5 cr apartment and paying 1 lakh rent doesnt make sense, rather buy something which we can afford without burning our pockets.
Awesome analysis...
However, flats in metro doesn't seem to be giving 10% / annum growth.. even if u wait 10 yrs.
Hardly, you will find 1 Cr flat will become 2 Cr. In 7 yrs!
In my view buying is anytime better than renting. If property is good it is like FD which you can encash anytime even though it may take some time for you to sell it but it will surely sell one day and give you good returns. In renting you are not losing your money cash immediately.
Rent or Buy = Same.
I have seen people with own house who does following things...
1. Sell their house for their sister's, daughter's marriage.
2. Some don't even enjoy own house like my friend has 400 square yard house in India and he can't enjoy his own house as he works in gulf and pay rent in foreign land hahaha
3. Some sell own house to deal with some big surgery costs.
4. Some sell it to divide a portion between their children.
5. Some have own house in Old cities and they prefer to pay rent and stay in new cities.
6. Living life like a miser. They just own house and live beggar lifestyle and are mean to people who don't have own house.
Nothing is permanent!
sir you are the eye opener, I also influenced with rent policy rather opting home loan and oppose as well people who trying to purchase home with home loans
I think buying a house at a very young age is stupid, cause you don't know how big a house would you actually need and how lavish would you want it to be down the line. In my opinion, one should buy a house at around 35-40. By this time I think your career starts to stabilize a lot too.
For a person getting new job & early income... It is always advisable to put 80% income in Stocks...
*Buy 5 dividend stocks... And 5 growth stocks...bus nothing else* ... Reinvest in them from their dividends.
at least for next 5yrs... After that he can buy house... He will not NEED to invest in Stocks from his salary income FOR HIS LIFETIME.... He just has to reinvest his dividends.
Really appreciate you for this video,
I got it so wrong earlier and when I realised this 1-2 year back, It was shocking and contrary to what many people were saying .
also it is much more nuanced rents increase, salaries increase, people finish it early, leverage, economic activity etc.
and you explained it well with simplicity at core.
@pranjal kamra after watching this video got my biggest confusion of buying or doing Mutual fund solved perfectly. By balancing both I did right decision and bought my dream home last year. No one can explain complex financial concepts so easily other than you....thanks a lot .
Dude this is one video that everyone should watch. Especially the ones who get swayed by Sharan or Warikoo or whoever. We are lucky that we have someone like you who’s breaking the myths of attractive (but highly stupid) ideas proposed by other finfluencers.
So did u buy a house based on this video ?
बहुत बड़िया समझाया आपने, मैंने 3 दिन पहले ही एक वीडियो देख कर अपने भाई से बोल रहा था "पापा ने लोन में घर लेकर बहुत ही बुरा डिसीजन लिया है, इसकी emi पे करने के कारण हम लोग अपने आप को कभी ग्रो नही कर पाएंगे, हमारी जवानी कर्जे में ही डूब जायेगी" लेकिन अब मेरी सोच दोनों साइड को सही तरीके से calculate रही है, धन्यवाद आपका❤से 🙏
At the end of the day, it is found that listening and following the age old advices that we grow up hearing in our households from our elders was actually sensible. Holds true for finances as well as health and anything.
Bade buzurgo ki suno. Fayda hi fayda. Hamesha maths aur science nahi dhundhna chahiye unki baaton m😊
Thats an incorrect generalization.
@@mithun070 sahi bole unki baare sensible h pr hamesha sahi ho ye jruri nhi
@@mithun070 yes i agree it is incorrect but not completely bro. We need to accept the positives and then build, evolve on the existing knowledge.😉
bacho ki gareebi bade buzurgo se hi aayi h
Bade buzurg keh gaye hai ki loan kabhi mat lo. Paisa jama karo aur khud ka ghar lo 😂
Renting and buying both have advantage and disadvantage. I agree most video show only one part but you are also doing same. Who will live in rent in 20 year old house. Also renting is also staregtic you can move your choice of locality and apartment for few year, plus you dont have liabilty to stay at same place your whole life, think from rapidly changing tech park always coming to new areas. Buying a house gives a peace of mind. It depend you want peace or growth in life. At early stage of life without any doubt renting is good.
Best finance video I have seen in a long time. Thanks Pranjal for your research and simplifying things for everyone. Cheers to your honesty!!
Great video.. can confirm with my own experience.. most important when you own a house you have peace of mind (when you buy within your limits..)
One thing you are missing I think..the value of house goes up by 10% p.a and become double in 7 years. But actually, if I want to sell my house then I may not get the double price since my house is 10 years old and there will be depreciation. The double value is paid by customer only for a similar new house and not a 10 year old house.
no, People are also interested in Resale flats. Because they get bigger carpet area as compared to new matchbox sized homes. If you bought flat in good location then dont worry it wont depreciate.
People are interested in resale because they are available at cheaper rates than newer ones, so appreciation is on the new properties and not the older ones
The only video challenging the odds 😅 Bruh you are dope! Great insights
@pranjalkamra you forgot to consider some aspects.
First 15 years back I took 2BHK @ 13K rent, now 2BHK @26K not one lakh
1 Lakh rental after 20 years will depend on salary which don't seems to increase. So it cut down your point then you have to pay 1 Lakh.
Now secondly, you shared real estate appreciation as 10% CAGR. But actually its near 6% CAGR. So 1 crore flat will not be 2.5 crore. Again if salary don't increase then it will never go out of reach. In rental also income tax saving happens. At retirement, you need not to live in so expensive city where flat costs 2.5 crore. You can easily take flat at 30-35 Lakh. Your PF itself will be like that.
You somewhere mentioned 12% return on real estate? Wonder which logic is used.? Mumbai 6.7% CAGR, Delhi 5.25% CAGR. Don't consider tier 2,tier 3 cities. Flat rate is not 1 crore!
So there is huge difference in data and calculations.
Also you haven't considered what will happen if 20 years 70K EMI and my job is private and like today recession happen. Seems its biased towards your inclination on real estate.
I bought plot in 2016 for 32 lakhs sold for 1 crore 6 months back, than i bought 1000 sqyards in outskirts im 4 months price increased to 1.35 crore, the thing is real estate is the safest investment and stock market 90% people loose money
@@Theoutsider43 tumhara rajyog chal raha hai. Galat fahme mein mat rah. Jab tak kismat chal rahi hai.. kamate jao.
Lyf ka important part tha mere liy jo clear Kiya bhai.
Mene real estate main kuch investment kiya pr lga glat kiya.
Aaj apne sb issue error jo mind m the clear kr diye thnx to uh bhai
what is completed here in this video ? you focused on buying a house.
( if everyone is going to the right then go left) conclusion : Buying or renting is totally depends upon the person who is earning and can assume his future so time and conditions will let you know when to do what.
Hypothetical Story : One of my friends buy a house and after 5 - 6 years his company wants him to relocate to some other location now he is paying EMIs and rent both.
Same ... I think 😮
He's getting rental yield also..
@@rahima-hi7gu why to take extra burden on head
@@rahima-hi7gu Renting house that you have bought for yourself is not an easy option. you always kept on thinking they are using your things. There are other type of people who bought house for renting they are not emotionally connected to that house. Hope you find my perspective valid 😊.
@@azadjain8534 Nothing is free bro.
I always admire you. Not all have the guts to be honest
One Should also research well before buying property then return might better than 10% in that case.
Also, taking Home loan keep your financial discipline in place as you cant skip Emi 😊
One thing more .
The risk taking capacity is lost when you take large amounts of loan for your home .You bound to pay large EMI’s .Your thoughts get restricted because of fear .you may have new businesses idea but not money .
So Agar option hai thoda rukne ka to ruk jao .
Aur pahle business m invest karo.
Ghar to ban hee jayega pahle se bada aur behtar
Hi Pranjal, pls make similar video on buying second home / investment home v/s invest equivalent money in different mode of avenues. My wife is building pressure on me to go for a second home for investment purposes by getting peer pressure.
Residential real estate works in cycles. Just like anything else. It is not a guarentee that housing rates will keep on increasing. 10% p.a. Is a mis interpretation of data. It works based on demographics and location.
Currently Mumbai real estate rates are sky high but with the building out of infrastructure. Commute time is expected to reduce drastically in this case real estate will flat line. Not to mention many areas get capped. Old buildings as the building depreciates after a certain age also tend to lose value. So there isn’t anything certain about value appreciation in real estate buildings.
Building life cycle determines the value of the building. After a certain age (since his calculations extend to 20 - 30 years) … you have to factor in depreciation / leakages / society issues etc etc .
As a tenant if you are suffering from a bad society you can just leave.
Secondly in 20 years your requirement plus income status will entirely change. You might have more family members might need a bigger home / smaller home if your kids have gone abroad for studies.
With the home you buy you are locked in to whatever size home you have.
Thirdly he hasn’t added the concept of tax and stamp duty to the equation at all.
Buying a flat under construction attracts a 5% GST and a 5 % Stamp Duty.
Unfortunately I think Pranjal has been motivated by biased parties to convince his audiences to buy a home
What a different perspective, this man is a gem
FINALLY FINALLY someone explained the truth. Thanks a lot for busting the myth.
You are doing commendable job brother. Such an easy explanation and you have not discounted any factor. This is what you call a holistic approach ❤👍👏
Real estate
Property value - 1,00,00,000
Stamp duty, registration - 7,00,000
Broker (if any) - 1,00,000
Basic Furniture/fixtures - 7,00,000
Total cost - 1,15,00,000
Down Payment - 35,00,000
Loan - 80,00,000
EMI - 72,000 p.m. for 20 years
Rent - 25,000
Annual Rent - 3,00,000
Broker (if any) - 25,000
Society Maintenance - 60,000
House Maintenance (if any) - 50000
Property Tax - 5000
Major Building Maintenance (if any) - 10,000
Total expenses - 1,50,000
EMI 72000
-Rent 12000
+Opportunity cost of down payment - 17000 (6%)
Net outflow - 77000
The house value should increase by 77000 every month for the next 20 years
If this doesn't happen, you will not break even
Why does property look like a better investment?
Pranjal sir always thinks both logical and emotional. Keeps us on edge until last minute of his video. Luv ur insights sir ❤🎉🎉
Bahut bahut dhanyvad,, mera sara confusion clear karne ke liye .. love this video ❤
Middle class family’s dream "Apna Ghar" means peace of mind.
Interest rates goes up mostly. Slightest increase without corresponding increase in emi would elongate the loan tenure. Secondly logic of capital appreciation may not really apply to flats comparing to an individual standalone house
I think you forgot one point of down payment, the 20% Down payment will also grow ~12-15% rate and 45K savings will go around ~12-15% rate so, if the cost of house 1Cr becomes 2.5 Cr after 20 Years still it can be bought before 20 years (If Only consider the financial angle). Also another angle for employees who change their job to different locations for them its good to go for rent, and buying Home would be for them who decided to live in the same place for a long time(min 20Yrs).
इन्वेस्ट इन म्यूच्यूअल फंड्स एंड स्टॉक लोन लेके क्यू अपने ऊपर बर्डन डालना
सब की औकात नहीं है रियल स्टेट को अफॉर्ड करना
@@Positivevibe-ashish kya baat hai ronaldo bhai aapke paas bhi paise nhi hai😢😢😢😢
I bought 2bhk flat in Gurgaon 5 years back and now I am loan free. I would recommend everyone to purchase house, rented house will never give you peace of mind.
This is simply awesome..
Thank you for the eye opening..
U have changed my entire perspective, I was so influenced by these influencers and staying on rent since ages...
Thank you once again
Ghar kharidoge toh
1. khud ka thoda financial pressure hoga jarur, but future generations will have it easier.
2. Marzi se reh paogey
3. Har 5 saal baad dhundna nahi padega ghar.
4. paise toh ayenge jayenge, acha ghar bana liya toh RENT bhi de paogey
Hi Pranjal sir I always gain some extra knowledge watching your videos and started investing in stock because of you and getting more than average returns so thanks a lot for that . The one thing that most of the people miss on about home loan ( sorry to say but you also haven't given any clarification on that ) is getting defaulted on that loan amount as we can't predict our life for the next 20yrs of span for job security which we all learned from the covied situation and the SARFAESI act due to which will not just lose the capital invested but that beloved property as well so due to that I think that equity market has an edge in that matter with the help of stop loss n other tools we can have the entire control on the capital invested and as well as the liquidity benifit along with it as compared to the property with an home loan .
This was just my perspective thought of letting you know . Once again thanks for spreading knowledge with each new video of yours. You will always be my guru in terms of financial knowledge.
Buy term insurance to protect investment in case of death
I paid total of 65L after 12yrs on a loan of 30L..
So i literally paid double on a property...
And now after 13yrs the value of property is 60L...
The plus point is i hav earned a property for our old age n for our kids
So it is still debatable topic..
Only corrupt or politicians can make profit on a property...
Corrupt by giving cash and politicals by knowing the prior information on the property
I'm grateful to you, sir.. you are really making people's lives hasslefree and sorted.. thanks from the core of my heart...❤
Over generalization, house is a depreciating asset where as land is appreciating so if the rate of appreciation is more than depreciation price will increase at a rate that beats inflation.
Now the catch here is that its very hard to predict at what rate the prices of land appreciates in an area as it depends on multiple factors. Whereas over long run its comparatively easier to predict the rate of return of an market instrument.
There is one more thing considering Rent versus Purchase debate , their HRA option helps on tax saving on Rent ....
Yes when pranjal sir considered tax benefits on EMI, he should have included HRA option on Rent paid.
Bank ka bhi EMI bahut badh jata hai jab intrest rate hike hote hai.
Mere relative ne 30 lakh ka loan liya
8saal tak EMI 30000 se bhara sab intrest me gaya sirf 2lakh principal paid hua
Aur ab bank ne new rate se remaining principal reschedule kar ke remaining 22 saal wala loan ke liye 32 saal ka extended kar diya mean 25 saal wala loan total 38 saal ka ho gaya
2nd side real me appreciate nahi hua
Unka 44 lakh ka ghar aaj bhi 8 saal ke baad 48 me buyer nahi mil rahe
Same purchased value hi mil raha hai ab esa lag raha hai ke rent pe rahete to achha hota
4X compare to rent cost suffering kiya aur haath me bhi kuch nahi aaya
It's cost within 8 year are 50lakhs lossed due to bought home by NBFC loan
Aur kyu ki bank se compliance me fit nahi ho rahe the NBFC se loan liya tha jo wese hi 3% jyada the
Aur ab bhi same situation he.
Same experience 1994 se 2001 me ek relatives ko hua
Please re revue your view also. It too not correct.
Aur actually bank wale jubardusti insurance, processing fees, valuation charges lagate he to wese hi average 2% intrest cost average me badh jate hai
Finally eye opening video for youth.. Thank You 👍🏻
Rightly truly,
I bought 2 small houses 2 bhk in ludhiana 25 lakh total. Now earning 11000 rent per month.
Real estate appreciation is not more than 5 to 6% on an average. If you could share the reference if its up to 10% it will be appreciated 🙏 its possible in only metro cities and not in second or thrid cities. Please clarify so that it will help to many of your viewer's . Thanks 🙏😊
Buy is my answer reason 1 . after retire paying rent is very difficult 2. you have peace of mind if you own a house , for every small change you have to beg your owner 3. for big changes like taking ac connection , proper painting of wall is not possible as per rent
Finally a genuine video on Real estate vs Stock market. Thanks Pranjal for the video!! This is my favourite channel! ❤🎉
It is best to save in SIP for 10 years and have 1 cr then may be you won't get the exact house or flat you wanted 10 years back but there will certainly be many flats available in 1 cr in other localities and hence the hard earned money will not go in interest payment. Or even if one take a housing loan after accumulating networth of 1 Cr invested in mutual fund it will give manifold return in future. If one take a housing loan at initial stage of job it will be difficult to have a decent amount for retirement so my rule is for a 30 years of job save initial 10 years for in mutual fund and leave the saved amout invested up to next 20 years . After 10 years when one can have decent salary go for housing loan and purchase a house/flat and pay EMIs in most of the cases one will still have some amount left for investment after EMI payment which will help them in in higher education of children.
Create a corpus of a crore.
Put it into an FD. That interest will pay your EMI all long.
By far the most sensible buy vs rent analysis!
Really a very nice illustration sir …. Cleared a lot for a medical person like me 🙏🏻👍🏻
Two points..
Why Anyone take home on rent for 20years,he is always free to change home atleast two years after he can move ,
Second property will also increased by its price after every years so rent will be same of its price according you 3%.
A.person who take loan he is loaner not owner ,he cannot sell his own home untill loan payment is not completed....
So still question is remain what ia better rent or owned a home 😮
Pranjal sir video is so much informative, he says everything based on facts and truth not fancy words to impress others❤
Moved to a metro city and started my carrier. Then bought a flat thinking of settling down. Lost job and got an offer in another city where I moved. The newly bought flat was rented out. In course of time, job took be to different cities.... home and abroad & everywhere I had to live on rent. Steadily maintaining my own flat became a nightmare as I had to rely on a local broker who would never leave excuses to ask money for paint, repair, commission, etc. and my rental yield was just a peanut. Pandemic made the situation worst. Eventually I sold it out almost at the same price I bought 10 years earlier.
Lesson : Never invest on a Flat for rental yield if you are not in the same city, if you have to use bank loan and if the location is almost prime.
I have seen many lucky fellows when property appreciated and investment became a boon but there are people like me whose story is otherwise.
Buy the way, I have my ancestral home once I am back to pavilion.
I doubt if RE will grow at 10% and rents at 8% in India considering the excessive supply that exist. It'll depend on state to state and city to city. You also say in the end that flats will not appreciate too much into the future. Most people who are on the side of renting instead of buying want to buy flats in future instead of an individual house. Since flat prices won't go up much as you say, finally the renters will have the last laugh as they'll be able to buy a good and affordable flat with their saved capital.
Can you please show some maths how renter will have last laugh?
@@tanujsingh9182 I'm talking about the renters who want to buy flat. As Pranjal himself is saying that flats won't appreciate that much, it's obvious that renters will be able to beat the price of flats in future. Already we're seeing empty flats in cities.
Honost Observations 👇👇
I rented a 3 bhk in 2019 rent 8500/- but if I brought the Property it would cost me 35 Lakhs registration interiors Saab Mila k 47 lakhs , Down payment 10,00,000 emi 21000 - 24000/-
Now I pay 10500/- rent same property and it's selling at 45 lakhs non furnished. Registration + interiors 57-59 lakhs.
So for an investment I brought a 1 bhk for 18,00,000 , I put it up on rent for 6000/- emi is 13000-15000/- @8%
The rent increase every year @10%
After 10 years the rent would be
15562/- and in 20 years it would be
40,000/-