People, if you are reading this, Please please please don't click on skip ad on any of freefincal video. Thank you Pattu sir.. Freefincal is the BESTEST source of unbiased information . :)
Excellent video sir. Thankfully I lived in own house while growing up. Hence no urge to buy and there is no pressure from family also :-) and yes, I renting house in the middle of city with I can't even imagine to buy :-)
Thankyou you so much sir. I was confused hearing from all advisors from youtube who suggested based on stats but you simply said if u have stayed in rented house through out u r life just buy a home ..
It’s a great video Sir. I am so confused on this topic. I did my calculations on excel but everything in the calculation depends on the equity return you are expecting and the real estate appreciation return u r expecting and both of these are unknowns so can’t come to a logical conclusion which is correct. Sir, I need you to clarify 1 line of thinking of mine. I understand that real estate is the game of leverage. So if i pay 10% downpayment and 90% loan so i am leveraged 1:9 at around 8.5% interest. Its like equity is 10% debt is 90% at 8.5% interest. So if the real estate appreciates i.e ROCE is more than the cost of debt then it increases my return on equity. So if real estate appreciates by say 10.5% per annum over long period then my return on investment becomes 9*2 i.e around 18% with savings on rent as well. Sir please throw some light on this.
Renting is clearly better than buying in the Indian context, looking at the rental yields. There are some weird cases where buying makes sense compared to renting. For example, with LTCG from assets like stocks, mutual funds, etc., buying can help avoid the hefty LTCG tax of 20% and reduce the recurring rent part of expenses. However, this still makes most sense when home equity bought doesn't exceed 10-20% of the net assets and it's bought outright with liquid funds, not on a loan paying hefty interest over decades.
I couldn't understand, What kind of retirement plan is being discussed here which is without accommodation, I feel in fact getting a house itself is 30-40% of the retirement plan ! So I think getting a house (whether right or wrong) wouldn't hinder retirement plan ..
Many people are doing jobs in metropolitan cities. But they are from small town. If they buy their house in metropolitan city, which is beyond their capacity and they will compromise in their retirement amount.
Wouldn't the house that is being bought also be an investment? Considering the house being an independent one and I don't get emotional and am ready to sell the house 30 yrs from now for a good price (land value would have appreciated) and utilize the money for buying a cheaper apartment further away from the city?
Put on a topic for Dead Fund investment by people example people invest unnecessarily without thinking priority example for dead fund is Car, etc etc....... unless and until that is a necessary
Sir there is one more category, already having an ancestral house to live in, and buying a flat for the sake of investment and tax returns, mainly because discipline will be lacking to invest otherwise. And then they rent out the apartment. Many people known to me are in this boat, I guess many IT employees in the last 10 years jumped on this bandwagon.
Generally this tactic is applied by politicians and contractors who had huge amount of black money. They park their money in buying land and properties and they show less amount on the paper But this idea is not good for those people who are doing job.
Sir, if I have the properties, should I consider it as equity or debt? While doing the asset allocation. If I keep it seperate, it's 53% of my asset. What to do now?
Sir you speaking Truth.... There is huge pressure from society and family pressure to bye home...and trapped in huge investment..
Much needed perspective. When a math professor asks to not do the math for rent vs buy..I'll pay attention 😊. Appreciate your efforts Sir.
make that physics, but it is all the same, thanks
People, if you are reading this, Please please please don't click on skip ad on any of freefincal video. Thank you Pattu sir.. Freefincal is the BESTEST source of unbiased information . :)
Very good advice at this situation. Highly appreciate your efforts .. now a days I hear covid offers in real estate sellers/builders...
I belong to 1st category, thanks a lot Sir for enlightening our knowledge :-)
Excellent video sir. Thankfully I lived in own house while growing up. Hence no urge to buy and there is no pressure from family also :-) and yes, I renting house in the middle of city with I can't even imagine to buy :-)
Thankyou you so much sir. I was confused hearing from all advisors from youtube who suggested based on stats but you simply said if u have stayed in rented house through out u r life just buy a home ..
Thank you for this perspective. Much needed.
It’s a great video Sir. I am so confused on this topic.
I did my calculations on excel but everything in the calculation depends on the equity return you are expecting and the real estate appreciation return u r expecting and both of these are unknowns so can’t come to a logical conclusion which is correct.
Sir, I need you to clarify 1 line of thinking of mine.
I understand that real estate is the game of leverage.
So if i pay 10% downpayment and 90% loan so i am leveraged 1:9 at around 8.5% interest.
Its like equity is 10% debt is 90% at 8.5% interest.
So if the real estate appreciates i.e ROCE is more than the cost of debt then it increases my return on equity.
So if real estate appreciates by say 10.5% per annum over long period then my return on investment becomes 9*2 i.e around 18% with savings on rent as well.
Sir please throw some light on this.
Superb sir
Eye-opener for youngsters
Realistic
Thanks
Please make a video on how recession (2000, 2008 )affected debt funds.
Renting is clearly better than buying in the Indian context, looking at the rental yields. There are some weird cases where buying makes sense compared to renting. For example, with LTCG from assets like stocks, mutual funds, etc., buying can help avoid the hefty LTCG tax of 20% and reduce the recurring rent part of expenses. However, this still makes most sense when home equity bought doesn't exceed 10-20% of the net assets and it's bought outright with liquid funds, not on a loan paying hefty interest over decades.
I couldn't understand,
What kind of retirement plan is being discussed here which is without accommodation,
I feel in fact getting a house itself is 30-40% of the retirement plan !
So I think getting a house (whether right or wrong) wouldn't hinder retirement plan ..
Many people are doing jobs in metropolitan cities. But they are from small town. If they buy their house in metropolitan city, which is beyond their capacity and they will compromise in their retirement amount.
How is buying a house that you're going to live in planning for retirement? You cannot give it on rent. Rental yields anyhow are
House cannot substitute liquid money needed for day to day living and emergencies. Real estate is not liquid like other assets. Thats what he meant.
I belong to first category sir. I started investing after watching your videos. 🙏
What's your take on building multiple Rental properties as a retirement strategy if my income allows me to take that path?
quite risky and a pain in the ass
New dimensions are always added by you, keep it up Pattu Sir
Wouldn't the house that is being bought also be an investment? Considering the house being an independent one and I don't get emotional and am ready to sell the house 30 yrs from now for a good price (land value would have appreciated) and utilize the money for buying a cheaper apartment further away from the city?
assuming what you will do 30Y later is a mistake!
Please do this in Tamil too, so I can share with my friends, relatives etc.
Thank you Pattu sir for taking out time and making this video. Very Helpful! HNY
Put on a topic for Dead Fund investment by people example people invest unnecessarily without thinking priority example for dead fund is Car, etc etc....... unless and until that is a necessary
Love and regards for ur integrity..bro
Another great video sir.
Sir there is one more category, already having an ancestral house to live in, and buying a flat for the sake of investment and tax returns, mainly because discipline will be lacking to invest otherwise. And then they rent out the apartment. Many people known to me are in this boat, I guess many IT employees in the last 10 years jumped on this bandwagon.
Generally this tactic is applied by politicians and contractors who had huge amount of black money. They park their money in buying land and properties and they show less amount on the paper
But this idea is not good for those people who are doing job.
Sir, if I have the properties, should I consider it as equity or debt? While doing the asset allocation. If I keep it seperate, it's 53% of my asset. What to do now?
A very good video!
You are absolutely right 👍👍👍
Thank u so much sir :-)
Thanks liked n shared
My opinion is rent house because house is a liability
I am the first kind of person... Bought the first house at the age of 27...
Hi I m pattu from freefincal😀
I like that sir