‘I rent for ₹1.5 lakh/month, math of buying doesn’t work for me’, says Bombay Shaving Company's Shantanu Deshpande

Deshpande's idiosyncratic determination came up during a speech with Hyderabad-based existent property entrepreneur Ajitesh Korupulu. The second was a impermanent connected Deshpande's YouTube transmission for a podcast connected investing wealth successful existent estate.

Korupulu raised the statement that paying indebtedness EMIs alternatively of rent leads to plus instauration implicit time. He pointed retired that for moving professionals, existent property serves arsenic an asset, and suggested that redirecting rent towards EMIs could pb to plus accumulation.

Explaining wherefore a household would take to bargain alternatively of rent, Korupulu said, "Let's accidental you're paying a rent of ₹1 lakh rupees ... and adjacent if you wage this rent for 10 years, you're not creating immoderate asset. Whereas, erstwhile you wage EMI, you're going to make an asset... erstwhile you privation to discontinue oregon suffer your job, cipher volition travel and propulsion you retired of your house."

Explaining the reasons

But Deshpande countered this viewpoint. He shared that helium resides successful a premier determination successful Gurgaon, paying a monthly rent exceeding ₹1.5 lakh, adding that the fiscal dynamics successful the metropolis didn't align with a buying strategy.

Detailing rental expenses, the premium quality of his accommodation and its marketplace value, Deshpande explained that purchasing the spot would entail important indebtedness leverage, resulting successful EMI payments acold surpassing his existent rental costs.

Additionally, Deshpande expressed his penchant for investing successful the nationalist market, citing amended liquidity compared to real estate. He noted that allocating funds towards nationalist markets allowed for plus maturation without the liquidity constraints associated with fixed assets similar property.

"But the mathematics doesn't enactment for me... possibly Hyderabad is different. I'm paying ₹1.5 lakh of rent including maintenance, play course, premium play, etc. The flat I unrecorded successful is worthy ₹7.5-8 crore, truthful if I were to bargain it and leverage 6.70 percent of it, my indebtedness would beryllium ₹6-7 lakh per period — which is 4 times the rental cost. So, I'm surviving successful a location that is one-fourth the EMI cost... it would marque consciousness that if I'm earning that ₹6 lakh EMI, I mightiness arsenic good enactment into nationalist markets and physique plus there," helium said.

Further, Deshpande said rented afforded him state of mobility. He noted the easiness of relocating wrong a abbreviated timeframe, contrasting it with the much cumbersome process of buying and selling property. He besides championed the convenience and flexibility of renting, contempt it not aligning with accepted asset-building strategies.

Bombay Shaving Company Performance

Based successful NCR, the start-up saw a important summation successful its nett nonaccomplishment for the fiscal twelvemonth ending March 31, 2023, arsenic per an Inc24 report. The company's nett nonaccomplishment soared to ₹80.2 crore successful FY23, which was 1.8 times higher than the ₹43.3 crore nonaccomplishment recorded successful the preceding fiscal year.

Despite the emergence successful losses, the startup's income approached the ₹200 crore milestone, and operating gross of ₹177.3 crore successful FY23, marking a 69 per cent summation from the ₹105 crore recorded successful FY22, it added.

Bombay Shaving Company chiefly generates gross from the online and offline income of its products. When factoring successful different income streams, its full gross surged by 71.7 per cent to ₹182.4 crore during the reappraisal period, compared to ₹106.2 crore successful the erstwhile fiscal year, the study said.

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Published: 02 May 2024, 10:46 AM IST