Bombay Shaving Company CEO pays Rs 1.5 lakh rent, shares why it 'makes no sense to buy' a flat

Bombay Shaving Company founder and CEO Shantanu Deshpande recently shared in a podcast that he pays Rs 1.5 lakh rent for his apartment in a prime location in Gurugram and why it does not make sense for him to buy a flat instead.

Deshpande made the remark after Hyderabad-based real estate entrepreneur and CEO of ASBL, Ajitesh Korupolu, stated that paying EMI instead of rent eventually leads to asset creation.

“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," he said. "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.”

Responding to this, the Bombay Shaving Company head said the math doesn't work for him that way. "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 place, 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 percent 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.”