I’m Paying Rs 1.5 Lakh Rent: Bombay Shaving Company's CEO On Why He Doesn't Want To Buy A Home

Deshpande said that his preference has always been to reside near his work, and renting homes has allowed him to relocate as needed while still maintaining proximity to his place of work

He elaborated on why, despite the financial aspect, he finds it impractical to invest in purchasing a flat

Source : YouTube

Shantanu Deshpande, the founder and CEO of Bombay Shaving Company, said during a recent podcast that he is currently paying Rs 1.5 lakh to rent an apartment in a prime area of Gurugram. He elaborated on why, despite the financial aspect, he finds it impractical to invest in purchasing a flat. Deshpande's comments came in response to Ajitesh Korupolu, the CEO of ASBL, a Hyderabad-based real estate company, who advocated for the asset-building potential of paying EMIs rather than rent.

“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 Rs 1 lakh. You pay another Rs 50,000-60,000 more you get a home. Even if you pay this rent for 10 years, you're not creating any assets. Whereas you pay the EMI, you're going to create an asset,” Korupolu said.

In response, the head of Bombay Shaving Company expressed his perspective, noting that the financial calculations don't align with his circumstances. "For example, and maybe this is a very Gurgaon thing, so maybe Hyderabad is different. In Gurgaon, I'm paying Rs 1.5 lakh in rent, including maintenance Rs 1.6 lakh on Golf Course, premium places, etc. The apartment I live in is roughly worth Rs 7.5-8 crore. If I were to buy that apartment and I had to leverage, let's say, 70 per cent of it, Rs 6 crore loan would be Rs 6-7 lakh per month of EMI, which is like four times my rental cost. So, I'm living in a house which is one-fourth the EMI cost. So it makes no sense to buy," he explained.

Additionally, Deshpande mentioned that his preference has always been to reside near his workplace. Given that Bombay Shaving Company has relocated its offices on multiple occasions, renting homes has allowed him the flexibility to relocate as needed while still maintaining proximity to his place of work.

“I always feel like the rental freedom is much higher. It takes 15 days to move into a home even if you're upsizing," he said. "Let's say you have kids, two bedrooms to three bedrooms, three bedrooms to four bedrooms, it takes 15 days to move. Moving is so easy. You are asset light, which is probably not your preference, but I don't have interest to pay. I have rent. But that's my thinking,” he added.