If you are looking for retirement, find safe neighborhood and make a farmhouse. Hospital should be close by maximum 30 min of ambulance time. You can buy decent land in 40Lakh and make a farmhouse in 60 lakh. 1cr farmhouse is achievable around small cities.
@@dailyhacks4634 what if the owner wants you to vacate the apartment at a short notice? It would be difficult to relocate that quickly and not to mention it would be expensive and time consuming to move valuables. Why not just buy the house and rest easy?Also there are emotional reasons associated with living in your house.
@@rockgames345 I agree with your point for peace of mind . But financially you will loose out . Buying a comfy house in the cities means bigger mortgage . India and the world will definately outgrow house prices . When you retire You will have your house. Probably worth a lot too but now money . Atleast not much money . At that stage you cannot sell your house cos you are used to the life style . It if you have invested years ago you now have steady flow of dividends. Home ownership means other things also tax repairs renovations . In the end these are options we are both not wrong
The points made in this video were exactly the reasons why I avoided buying a home in India for almost 2 decades and finally I said hell with it when I kept watching prices shooting up year after year. I saw apartment prices in a 2 tier city like Mysore go up from 35 lakhs to 1.25 crores! Some builders have already upped their prices to 1.45 cr. What I saw each time I told myself NOT to buy because the PE ratio was very high was that some other person would come along and buy it!! Problem with renting is that my landlord wants 15-20% increase and tempted by higher rents elsewhere, he wants me to vacate so he can rent to someone who he thinks will pay him higher! Moral of the story - I've been a damn fool and should have just bought years ago and simply lived in that home. Just my opinion and with due respect to your views also Mr. Akshat. In India, the population is so huge and diverse in terms of earning potential that if one tries to reason out logically (which makes sense), there's always someone who has a lot of money to buy the house/apt at whatever price is being quoted. Sad reality but true.
I brought myself a piece of land which I use in fish agriculture last two weeks paid in cash, I feel so happy for myself and my achievements watching this random video. So glad I made a good decision about my finance that changed me forever. just hope it encourages someone that it doesn't matter if you doesn't matter if you don't have any of them right now, you can start TODAY regardless your age INVEST and change your future! investing is a grand choice I made! .
Question - the 2021: 2018 price comparison, the price of the house (numerator) was reduced from 5 to 2.5cr (assuming 100% increase in 3 years), the rental increase per annum was assumed as 10% so why was the denominator i.e. rental income was updated from 15L to 13.5L? Over 3 years there should have been 3 decrements of 10% each, so rental income would be 1,093,500 (~11L) in 2018. The logical explanation still remains the same.
Setting apart all the financial reasons, at the end of the day we are all emotional beings, we all need a house that makes us feel at home and at peace.
In Bengal household we have a saying "Mati Sona, Sona Mati" means Land is Gold, Gold is Land.. Instead of buying realty sector buying physical thing it will appreciate but better..
There is also maintenance cost which is equally increasing at a rapid rate. So in one year if I am spending 5L to maintain the house including insurance cost for a house of 2.5 cr then the cost will atleast increase by 10% so overall growth has to be adjusted with maintenance cost appreciation.
Making money online, living in Tier-3 cities (200km from Delhi), built our own home in the posh area having park facing view, never got any loan, thank god I am not in this race. Watched the video just for learning purpose.
The biggest problem with real estate is liquidity, that's why I hate it. When you want to sell real estate quickly it will never get sold at the market price and when you want to buy it, you have to pay the premium.
Except for the positive that you can build it modern and in a particular was to suit your lifestyle, but when you want to sell it....duh....in a hurry....people will ask for extremely low prices knowing you are in a hurry. Not like gold where you ca instantly convert it into cash. And when people buy property its complex. They will have 1001 suspicious questions which you wont like....so much paperwork and checking....they can find fault with everything if they want to.....then you will have to hire advocates to check the paperwork and agreement etc form your side else they will put a clause where they pay you advance and then the deal stands moot.....If your planning to ever sell it....NOT WORTH THE HASSLE.
The price of the house never goes up. Land prices do. The building always looses value even if you maintain it. The land is usually outgrowing the deprivation of the building
I totally agree. Actually, i am planning to buy a house in Portugal. In central portugal, which is extremely beautiful, I can buy a huge house with enormous garden for less than 20 lakhs.
One simple reason to own a house: You don't have to ask anyone to put a nail in the wall ? ...and there are various such reasons ... if you can't enjoy money, then all this money sn't worth it Buying a house is many times a emotional decision but if you think then its practical too. For example: You have spoken of early retirement in many of your vids. So if you take one, then stay in you house, meditate or educate..at least you will have a place to settle down easily... :)
Hey ! To be honest There are affordable projects that can range from 20lakhs to 60 lakhs they provide you atleast a shelter and after all they are not that bad! I live in ahmedabad there are affordable 3 bhk apartments from 50lkhs
My grandfather built a house for 3 lakhs (land-1acre & then the construction of house in almost 10k sq feet area) in around 1980s, I don't know what the worth might be now but it has been my home from when I was born & it gives us a sense of security that no matter the business goes up or down we will always have a place to stay, to come back to which is priceless. If you have the money, you should always build a house, it will help your family for generations to come!
“You can explain this to your parents and sound smart “ . My parents : “don’t show ur stupid calculations , this is how the world works . Jump in the well “
True... Mere pas parents ka 1.5 cr ka Mumbai mein house hai. & Salary 20 thousand Bank Account mein sirf 15000 No FD No any other investment Ghar ka monthly expense 15000 No jewellery nothing else. Just old house but it worth 1.5 cr Ab isko agar hum sold out karengein and Kisi aur jaga Like Thane mein acha bada Ghar buy karengein 70-80 Lacs/approx toh humare Pas 60-70 Lacs Cash Save hoga & we Can invest freely anywhere at anytime. Become Rich Over-night BUT Parents don't understand these things ☹️
They probably believe that the price will rise and allow them to sell the stock at a profit,or they intend to collect the dividends paid on the stock as investment income.
Exactly. And he's conflating rental yield with asset appreciation as per convenience. Plus, no bank will lend you 2 CR to invest in mutual funds. But they'd happily do that for a house.
Your last point was one of the most sensible thing I have ever heard. Pay for the EMI from your investment returns and not directly from your salary. That's very much true. I think twice before even getting an EMI of ₹2000 on my credit card. Because EMI are always a source of headache if you don't have an income source. In my opinion we should try to finance EMIs from investment returns as much as possible. Also definitely buying a house for crores of rupees is sheer madness. With high paying private sector jobs, you can't guarantee that you will make same amount of money for the next 30 years. You won't even know if you would stick in that profession for the next 30 years. Real Estate prices in India are super inflated and not affordable by any salaried person.
If you are paying some X amount as rent, for Y years. and the X amount increases by Rs. 500 each 11-month rent cycle and your landlord keeps you hardly 3-4 years in that house post which there would be a Rs. 2-3 k difference between the actual market rent and the increased house rent of the same house hence landlord wants to rent his house to another person with a new agreement. Now, if you have purchased that house, the EMI would be around the same Rs. X or a little higher. If you want to relocate to another city resale it and you can always resale at a higher price than the initial buy price. The resale price only drops if there is a major change in the zone, development work, local govt body policy changes or else it's fine to purchase a house.
Most of the houses in Noida have become vacant after Corona so don't live in assumption. My landlord is not calling me for two years to increase the rent.
@@rajsingh-lr3nd Same in Pune. I rent in Pune. After visiting 5 houses to rent, the landlords were repeatedly calling me to enquire if I was interested. Few years ago, it would never be the case.
Ha ha which world you are in Bro ? Always higher value while resale ? You probably never sold a house in Bangalore it seems it's such a big headache and you have to sell it for loss in most cases . For retail investors selling is big issue you will loose money in most cases
@@rajsingh-lr3nd Isn't a pandemic a wholly unexpected crisis? I understand that it's not useful for landlords at this moment, but then what will the situation be after 10 years?
@@JR-ee4xf agree but Modi govt making difficult to use cash, it only shows that no one can easily use cash, in white economy people will purchase based on loan eligibility. Our GDP to real estate price is mismatch. Read Sourabh mukherjees book u will understand. Probably it good to have one house just to stay not great for investment anymore. Real estate price may not go up but may stay same level or bit high. New generation people do not want to buy real estate rather they want to invest in MF, gold, stock market, bitcoins, commercial real estate.
My father is a real estate agent, he always tells me about the life cycle of the cost of a house or land. It grows pretty rapidly at first and then the growth dies down to a halt.
@@AkshatZayn bro i have to invest around around 1 lakh per month at the moment i am investing in mutual funds....is there something where i can earn 1 cr in 4 years..???
Calculation mistake: at 10:30 timestamp, when calculating rent back in 2018, he need to consider 3 years and 10% increase. Which means, 11.3L at place of 13.5L. 13.5 will be when you reduce rent increment of only one year, not compound of 3 years. Though logic still make sense with that number as well. Correct me if I am wrong.
Rent doesn't increase 10% every year. At max it will increase 5% in 2-3 years. Renters will find lots option. No one will stay in a place where rents grow at 10% every years.
The last point you said was the best advise if someone focuses on that! I keep saying this to my wife.. we will buy our house (for emotional purpose) when our investments can pay for our EMI.. then we are very close to achieve financial freedom! glad you said it too!
Bhai 30000₹/month ki EMI pay karne ke liye investments se hone waali income ka minimum 360000₹/year hoga. Aur aise mei toh 36 lakh invest karna hoga aur uspe har saal 10% per year minimum banaane honge for long term woh bhi post tax. Aur yeh toh minimum hai just to buy house from interest on investments. Practically dekha jaaye toh zaada investment karni hogi aur extra profit bhi banaana hoga for other life issues. Ab aisi income banaane mei toh budhaapa bhi beet jaayega. Kyun bhabhi ji ko jhoothi umeed dete ho. Seedhe seedhe mana kar do.
This HUL PE analysis reminds me of saurabh mukharjae. He's the guy i admire a lot for his achievements. Same I feel for you as well. Finally someone is making true content without having any hidden agenda behind it. I hope you continue doing this.
@@arindamdutta9371 can't comment on whole TH-cam community. But most youtubers I see, only care about views without even caring whether the content they are producing will help consumer in longer run or not. And it's very difficult like to take a unbiased stand on big giants like credit cards companies like akshat did in one of his videos. I really like that.
@@arindamdutta9371 I agree to your point that nothing is done without an agenda. But you cant deny the fact that content of this channel is worth listening to. Just like Valuetainnent.
I have been a strong believer of buying commercial property rather then buying property for personal use. Very well explained, all this makes sense. Subscribing your channel
I was looking for the key point when is the right time to buy a house. And I got it. When I am able to cover the EMIs with my investment returns. That's brilliant advice. Thank you Akshat.
This happens in mature economies where it’s only white money is dictating house prices.. india, we are talking about 50:50, 60:40, 70:30 ratios depending upon geographical localities , this would distort the returns % ages
@@crococrash Also demographic who pay rents are fixed, just because of low rents number of tenets increase. But if rents do increase tenants will start looking for lower priced rentals. Also as the price of house increases so as property taxes. Then you have to do maintenance of the property. If house prices increase too much that would become election manifesto. There are talks of govt's moving to central bank digital currencies, your networth will become a row in govt run database server would be difficult to use black money in those circumstances. Sad thing is if housing market goes down then it will take down everything.
Really Superb vedio brother. Iam From Hyderabad. My salry is 40k per month, age 32. Scratching my head from 2 years to buy house but rates are too high nearly 1 to 1.5 crore. This vedio opened my eyes. 👌👌👌
Great Video Akshat for 2021 time frame. It makes super sense for me. My family members are pursuading me to buy a house in bangalore to earn rents in return.. We already own a house in bangalore and we are paying EMis for 5 years. Now, that I saw your video, I can explain my family about return on own house in terms of P/E and convince them about why I shouldn't own another building for renting purpose with massive EMI at the age of 38. Unfortunately, I am late to learn about the power of stock market to generate long term wealth. Nevertheless, I am learning from your channel and other channels about stock market and am picking low value stocks to accumulate in this massive bull trend. Cheers, Sriram
I don't remember the last time I commented on a youtube video, or if I ever did in the first place. However, could not resist doing so here, because you are a rare find! So much of inspiration and knowledge to draw from each of your post. Thank you, seriously!
Ques- Won't PE ratio decrease now- because housing rate increases by 5% and rent increases by 10%. So a decade later PE ratio (33*(1.05/1.1)^10=20) is again in favour of housing rate jump. It might not increase by 30-50% like in 90s/00s, but it will certainly increase by more than 10%. This explains the concept of cyclicity
5 years back i sold my ancestral property for 3 crores and bought 180 acres of undeveloped agricultural land in south india near western ghats for 1.8lakhs an acre. Currently i sold 30 acres of the land for 3crore at the cost of 10 lakh per acre. I get an annual income of around 2crore non taxable income from 150 acres. Cheap agricultural is the way to go but with good documentation.
3:47 there is a big difference between so called research papers and reality, while research paper says growth rate is 5-6 % , reality is that a 2 BHK house which costed 40 lakhs in say 2020 , would cost around 50 lakhs to buy now . There is also a difference between buying and selling rate of house, so while for a person who wants to buy a house the cost of house keeps going up drastically , but that doesnt mean that when as an individual you want to sell a house you would benifit in the same way - on contrary when you are planning to sell a house as an individual you would have to wait for long to get a good price. A friend of mine bought a 3BHK flat for 25 lakhs , 5-6 years later when I wanted to buy a flat , the cost of 2 BHK flat in his building was 50 lakhs. Therefore reality is that , its always better to buy a house sooner than later , because the cost of house espcially in India will always keep going up and more you wait , the more yoiu will pay for lesser space & facilities. however this doesnt mean you jump and buy a house blindly , you should always do your due diligence while asking these questions, where do you plan to settle. are you looking at the house more as an investment ?, how comfortable are you with the loan amount and loan period etc
Bro location matters a lot too, and you are being very specific . If something booms up from 2020-21 it doesn't mean it will keep increasing till eternity right, maybe it will stagnate for the next 7-8 years. My parents bought a house in Nashik in 2014 and its price hasnt increased at all. But I do agree that some sort of property ownership is nice if you have done your research
Can you make a video on Fractional Commercial Real Estate Investing which is a new concept in India? I was reading some articles of it on YourStory, livemint and startups like strata prop, hBits, etc are allowing people to group together and invest in commercial real estate without having a high capital
@@pallabbandyopadhyay6856 REITs are already listed on stock exchanges. I think @Amaan BG is talking about different way of investing in commercial properties. They create an SPV which is like a pool of funds handled by a Trust. It's like crowdfunding a commercial property and the Rent that is earned is distributed to the investors. Earlier it was possible only if you had large sum of money to invest ,but now with these startups the ticket size has reduced to about 10-25L.
20% of channels provide 80% value on internet. This is true in this case as well. Hats off akshat to make such analytical videos & not opinionated. My feed is getting more & more productive.
I have different understanding for this topic: 1. 5.6% is average growth rate, there are places where the growth rate is more than that, and places where growth rate is less than that. 2. You are not only getting 5.6% increase in the price of the house but also rent. Which is about 1.5% to 3.5% of the house value (this is average in india, you can get better or worse returns depending on the place). 3. Majority of the population is shifting to urban places, so in the long term houses in those particularly developed places is going to increase in value. 4. It is a very good asset, because chances of a physical asset going to zero is almost impossible, until and unless something major take place in that particular. Now invest in the house when you have excess cash or that you can pay the loan amount within few years. Always have an emergency fund and health insurance before making a major purchase. If you have excess of cash, you can also become a builder.
I can get what you're trying to say, however, what you're talking about here is commercial property in tho video Akshat has discussed about owning house for personal use only that means, you would not be getting any rent because you're staying there. And, the public is moving towards urban area is true, still you would not sell your own house when you want to make investment, it's because you need money, and you don't know what would be the market condition when you're cashing your house.
The information you are missing is market participation and asset demand.. equity markets in India are very small and participation is extremely low.. so the stocks will be under valued no matter how good they perform since there is no demand.. but housing participation is almost 90%.. anyone who had money wants to hold in real-estate value..so the value multiplier will be much higher in real-estate.. fundamental analysis is not applicable to real estate as it's has infinte lifetime.. so a 10 year fcf and growth factors don't hold good..
You nailed it! Buying real estate as an investment is dated strategy.. Buying a house to make it a "Home" is recommended. Many people need a place where they feel safe, comfortable, and spend time with loved ones. You cannot put a price on that.
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Back in 2008, I was working in Capgemini Mumbai office and I was living in Airoli. There was a gated community near my room, Yash Paradise. It was newly constructed at that time and the price of a 2BHK was around 12L to 15L. Cut to 2010, I was relocating to Bangalore. I casually asked the price of a 2BHK in the same gated community and found that it was around 50L. Now, the price in the same building is close to 1.5 Cr for a 2BHK. So, guys it is up to you to decide whether you should invest in housing or not.
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investing the same amount (12L) at the same time i.e. 2008, in shares, say TCS or infosys, their value would have been 2-2.3 crores today. You can calculate using historical data.
OMG how can I express my happiness to u? ur such a good person giving such quality information. within 1yr, ur channel will also become a multi-bagger in terms of subscribers. 😊
I like your analysis and for those who does not own a single house I suggest to buy at-least one house for yourself because same house or apartment would cost you more after few years if you don’t buy now. I agree house does not give you returns if you stay or apartment price will not increase after you bought but the point is it will cost you more and more later if you want to buy. Let’s say You will invest in stocks and wait for few years to make some money and at the end what you will do? You need to buy at-least one house right? By that time same house would cost you more + add the rent amount of all these years you paid. It will come to same point.
Here's my specific case and m sure a few people, if not a lot, are like me. 1. Me and husband came to US 10 yrs ago for MS 2.took education loan both of us 3. Started earning salary 4.fully paid off loan in 3 years 5. Started saving for a 2 bhk apartment in Mumbai in prime area (caeser road, andheri west) where we will live after coming back to India for good 6. Money saved 2.5 cr.. Bought a nice 2 bhk for 2.25 cr 7. Right now its on rent and we are still in the US, will go back in another 4 yrs or so So in our case we bought ready possession flat The builder was trustworthy The building is road touch with excellent connectivity It goes on rent immediately So in my opinion its not binary to buy or not to buy.. If you do as we did it still works out great.. After all each individual case is different
I think a more practical approach for most would be to plan a certain percentage of the EMI to be covered by the investment returns. Aiming for a straight 100% (after paying the down payment + taxes, which would deplete the existing investment anyway) is attainable for someone who is already wealthy, rarely a first time house buyer.
I am listening these arguments since 2007-2008 and believed firmly. I read enthusiasticaly all international financial experts how realty in India was ridiculously overvalued and didn't buy for long. But now I regret it. When I count all the theatrics of landlords and the mental trauma caused by it, owning my own abode definitely sounds cheaper. There has been time in my life when dealing with the boss in office was much easier than the dealing with an uneducated, greedy and mannerless landlord. Due to these cumulative reasons people buy homes even though all points raised by you are technically correct.
100% agreed, Thanks for genuine advice. you earning trust by speaking reality. Real estate market is already at 10x to real coasting. House or flat prices are out of affordability of 70% class people in india who earns below 50,000 to 70,000. Why to buy a house if you can get 65 lakh duplex ( in vadodara) on rent of 10,000. You can earn multiple returns and financially stable if you learn proper investing.
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The suggestion for buying a house only when you can pay EMI with your investment returns seems a bit too far fetched...!! Suppose you have a EMI of 25k/mo that's equal 3lacs..to generate a return of 3lac rs at the rate of 10% you need to invest 30 lacs.. (post tax) +Down payment 20% minimum and taxes 6% for the house.... By this logic the common man should never buy a home.. especially the middle salaried class...
my parents keep asking me to buy property in india for long term and renting it out. I am in usa and here the emi of the house is lesser than what i can get for rent. so its a win win. hence its easier for me to buy here vs india.
@@kaustubhraizada well actually the capital is not costly if you think about the margin between inflation and cost of home loan. In india it’s at 7% home loan vs 5.5% inflation (2020) compare that to USA. Home loan 3.5% vs inflation 2% (2020) . So the delta is 1.5% in both cases. Of course there are multiple factors to consider. Like in india because of higher inflation it’s becomes cheaper to buy now and playback in later years due to inflation making it easier to payback fixed loans.
It feels this analysis is exclusively focused on NCR, suggest u also consider the market dynamics of other metros especially places like Bangalore/ Mumbai
Yess true the average rental value I get is not 1.5lacs rather 2.5 lacs in mumbai city...Mutual funds too are not always giving 12-15% return as in my experience it gave me 5-6% return... sometimes even negative value...Property gives medium risk medium gain[Better to be stable]
@@janmejaypandey2424 agree. I bought a land in Shamshabad in 2008 for 70 lacs and after 13 years it may be worth the same. And I also bought land in Sainikpuri, Hyd by paying 19k/sq yd when the best offer was 14K/Sq yd; all white and paying taxes for 19k/sq yd. Now this land is going for 50K/Sq yd. Yes, I do not have P/E because it is land. He is just giving one perspective and those calculations are hard to make. He should used some use cases. Now, his talk is more focused on buying apts/villas which are more than 2.5 cr. This is a very small segment of population I believe.
Incorrect calculation. While calculating the P/E ratio for 2018, you halved the price of the house but reduced the rent by only 10%, instead of 10% per annum (by your logic rent increases by 10% every year, hence you should have dropped the rent by 33.1%)
After watching few of your videos, I am seriously considering sitting down with a pen and paper and go through all your videos and note down all the beautiful logics that you provide....really some top notch work man
You are young Robert Kiyosaki🤟🏻, I would love to learn from you how to become financially independent in next three years. Please Create a separate playlist on this particular aspect.
Ive been flipping properties from 3 years and made an avg of 35% per year even in the covid times. This examples is like taking one avg stock and talking about its growth rate. I am an active trader, investor in stocks too. But nothing gives peace of mind like a real estate investment. One needs to understand different asset classes.
flipping properties is different from buying a house mate. You need to have real skin in the game, paying 1cr to own vs paying 10l to renovate a house and sell is not the same. You couldn't have given a worse example to contradict him.
@@amar19961 well on the contrary bought a house in 2015 end and holding it still. CMP is 130% my BP. Like i said I can give you endless examples of good and bad in both real estate and stock market. At the end of the day its about the investor.
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Who wants to pay rent for the rest of one's life...owning a home is one of the best pleasures In life... You don't answer to anybody..... You own that place ... It gives you a sense of pride... That you've achieved something .... Not evething is about money my friend.....
Buying a decent house and struggling in the initial 2-3 years paying housing loan EMI is the best decision I made in my early 20's. All this calculations gyaan by youtubers go out of the window once ground realities hit you.
@@hisoka7i Renting don't mean you are earning. You will get your principal amount in 20-30 years. And your asset is not liquid. So taking into account inflation, the maintenance you will be better of with investing that money in non-risky liquid assets. ✌
@@ujjwalthakur96 I have a 2bhk on rent to students. It's a 2 floor house. I get 20k rent every month. And 20k deposit for maintenance. I make good returns
I watched your video about inflated CTC ..I liked everything about the video. The way you talk .the way you represent..proper research ..so following you since then ..keep up the good work
buying house is definitely a emotional decision just like buying gold , however that will never ever change in india hence property prices will never come down can u buy stocks worth 2 cr and spend sleep less nights thinks about markets up and down.. also renting scenario is different in Indian compared to abroad ..imagine ur house owner asking you vacant the flat in just 6 months of you moving coz of xyz reason unlike abroad where there is long term lease like 10 years and so on
It's 9 PM, I open TH-cam and anticipate a new video from Akshat at the top of my recommendation. TH-cam's Alogo to me: Hitesh, you're so predictable! 😀
I have been telling the same naala analogy considering the living situation in general but people don't like to hear it. Too much emotionally invested to think clearly. Anyway spot on analysis.
The growth rate of real estate in India may seem crazy, but what’s even crazier is what has been happening to real estate in the USA in the past year and a half… startling and worrying figures 😬
@@kalashsharma4344 that seems unlikely to happen. The difference between what happened in 2008 and 2020-21 is that 2008 consisted of leverage in forms of mortgage payments that were not at a fixed percent. In 2020-21 the buying spree is because of the accumulated savings of people that would’ve otherwise been wasted on travelling, vacations etc. There is essentially no borrowing in the present case. The need for a home in a pandemic, combined with huge savings in 2020, along with rising lumber costs has caused the surge according to real estate expert estimates :)
@@shivkhakhar3273 I know bro it is unlikely just mentioned it for fun Btw what are your opinions of half a billion bet against tesla by Michael burry also he has been suggesting signs of a bubble
Nonsense video as usual, i will never buy a house, i will never buy a car, i will never buy headphones...no thanks dude... I dont want a treasury of money in my 60s, i want a life full of memories and a good house to rest myself upon.
Exactly....what is life without making memories with family and having emotional investment. One day you have to die , you live only once . This guy makes complete miser videos !
No one is stopping you from buying a car or house if you have the money to buy them. The catch is buying them with loans and and then stressing out the remainder of life to just payback those loans.
True , the emotional connect people have with their own house is incomparable, you can't live on rent for your entire life, and suppose you do imagine what rent you have to pay when you retire, all your savings and retirement plan will go in your rent , a home is a must.
@@durgaprasadreddy5033 The thing is, i would rather be stressing out on paying loan on my own house than paying rent to someone else and also worry about getting kicked out anytime a distress situation occurs, There is atleast light at the end of tunnel of home loan, at the end of paying that loan you get to keep that house of yours which you love and have memories in, while paying rent, there is literally no end, you just keep up that rent throughout your lifetime moving from one place to another on the wish of the real house owner, you pay money throughout your life have nothing to show for it at the end. Yeah you can surely do some mathematics and show that you are at a loss buying house or something but its okay, i am ready to take that loss for the feeling that you get in your own house.
@@hassanali-yi4bu It is easier said than done. For example, a house loan of 1 crore at 8% p.a. for 20 years accounts to an emi of 84000 per month. 84000 is a huge amount for an employee even with 1 lakh a month package. Instead the employee can rent out a similar property for 25000 a month and save remaining 59000 which can be invested in real estate or share market. Moreover the advantage with renting out is the employee is not bound to a particular location and can shift easily when a better opportunity arises in a different location/part of world
Wanted to point out a small mistake at 10:25, if you go from 2021 -> 2018, rent wont decrease by just 10%, it will be 100 - (100/110)^3 compounded over 3 years.
I live in the UK and have a flat in India - NOT for emmotional or investment reasons but just to live in my own house and have all the freedom and privacy and the feel of being in your very own house which you cannot have in a hotel, or with relatives....
If the town is small, you never know there is govt policy or something that influences land/asset value change, the unique prime location doesn't remain as unique and as prime as it is 😀
Some skewed arguments 1. You need a house to live. 2. Rent you pay, goes to landlord. EMI on loan (nearly 80%) goes towards paying off your Loan Princ (20% interest) ie building your equity. 3. Finally, you can leverage on a mortgage loan (20% down payment, 80% loan) and you benefit from growth on entire 100% (on stocks you will only earn on your initial investment ie 20% here)
I disagree on the general methodology you have used for comparing the real estate market to the stock market. Please don't get me wrong- I love your content and follow your videos to build knowledge on a lot of other things. Here's what I feel: Like the share market, there are multiple variables here. You can almost consider every city as a stock. Not all stocks will perform the same. Yes the overall P/E ratioexplanation helps give an overview of the average performance but it misses out on capturing on eveeything else. The housing scene in Noida, Delhi, Bangalore is rightfully located at the middle- near the national average. But look at other geographies- which have promising growth in upcoming years (overall economical growth) The likes of Jaipur, Ahmedabad, Indore. Land prices in these cities (again we cannot and shouldn't look at any area in the city and expect phenomenal growth) have grown at amazing rates and continue to do so. What are some of the variables that one could look at? Masterplan 2025 for the city published by the development authority - It tells us how will the city expand, what are spaces allocated for near future Upcoming Economic Zones- Just an example- Look at Mahindra SEZ coming up in cities like Jaipur which otherwise had no economic push and were majorly tourist driven economies. The surrounding areas continue to shoot. Even in times when the National housing scene may not look promising I am not sure if I missed out on something huge which I may have overseen so I beg your pardon. But I think the housing scene is pretty similar to the stock market where rules of consolidation apply. In the end it's deep analysis and study that pays off.
Yes, you said right that every city is like a stock. Even, I feel there are lot of towns/cities where the housing market will grow exponentially in the upcoming years.
Most of the transactions you see in these regions are not on cash especially in land (upwards of 60% value is in cash, registry for only 40%). So that is not suitable. Also flats haven’t given good returns and the ones that gave good returns are expensive (back to starting of the video). Lastly on the methodology, Akshat is correct, he is explaining as P/E whereas institutions look as cap. rate (almost same), and the one property that WILL give good returns despite of being expensive, doesn’t have attractive risk/reward ratio NOW
@@Ash-gt1qw I agree to disagree here mate. Flats are in my opinion never a good investment option. The benefit you get by investing in such geographies is that you can get land at much lower costs (because these are up and coming areas within the city) Apartments, condominiums or any unit that factor in only a fraction of cost as the land cost will anyways not give returns. And you will have to resort on rental income. Land on the other hand has speculative value (if the area is not developed)
I don't think anyone in India would ever be able to cover their EMI's through investment returns. Isn't that bit unrealistic assumption? Those who have massive corpus would anyway buy it using cash.
Per capita income in India is just ₹ 1.6 lakhs in metros it increase to ₹ 3 lakhs. Even a small 1 BHK Flat of 550 sq feet in Metro or top cities cost more than Rs 40 lakhs. Out of ₹ 3 lakhs, maximum ₹ 1.5 lakh can be paid as EMI each year for 15 - 20 years. If one divide ₹ 40 lakhs by ₹ 1.5 lakh, that comes to 27 years. Then there are regular costs like Society Maintanence, Common Repairs of Building, Property Taxes, Regular Upkeep if property which can cost upto 1 - 2% of the House price each year.
Buy your house in the city where you want to live your retired life. For rest of the cities, rent a residence near your workplace.
If you are looking for retirement, find safe neighborhood and make a farmhouse. Hospital should be close by maximum 30 min of ambulance time. You can buy decent land in 40Lakh and make a farmhouse in 60 lakh. 1cr farmhouse is achievable around small cities.
Why you need a house you need money. Of you have enough money you can rent any place .
@@dailyhacks4634 what if the owner wants you to vacate the apartment at a short notice? It would be difficult to relocate that quickly and not to mention it would be expensive and time consuming to move valuables. Why not just buy the house and rest easy?Also there are emotional reasons associated with living in your house.
@@rockgames345 I agree with your point for peace of mind . But financially you will loose out . Buying a comfy house in the cities means bigger mortgage . India and the world will definately outgrow house prices . When you retire You will have your house. Probably worth a lot too but now money . Atleast not much money . At that stage you cannot sell your house cos you are used to the life style . It if you have invested years ago you now have steady flow of dividends. Home ownership means other things also tax repairs renovations . In the end these are options we are both not wrong
Where you think you want to retire in india will look very different by the time you retire :)
Life is not only about excel calculations , house is where we live peacefully with your family
The points made in this video were exactly the reasons why I avoided buying a home in India for almost 2 decades and finally I said hell with it when I kept watching prices shooting up year after year. I saw apartment prices in a 2 tier city like Mysore go up from 35 lakhs to 1.25 crores! Some builders have already upped their prices to 1.45 cr. What I saw each time I told myself NOT to buy because the PE ratio was very high was that some other person would come along and buy it!! Problem with renting is that my landlord wants 15-20% increase and tempted by higher rents elsewhere, he wants me to vacate so he can rent to someone who he thinks will pay him higher! Moral of the story - I've been a damn fool and should have just bought years ago and simply lived in that home. Just my opinion and with due respect to your views also Mr. Akshat. In India, the population is so huge and diverse in terms of earning potential that if one tries to reason out logically (which makes sense), there's always someone who has a lot of money to buy the house/apt at whatever price is being quoted. Sad reality but true.
He made this video 1yr ago and in last last year again prices shoot up 50-100% all over India.
Logic doesn't work in india.
I brought myself a piece of land which I use in fish agriculture last two weeks paid in cash, I feel so happy for myself and my achievements watching this random video. So glad I made a good decision about my finance that changed me forever. just hope it encourages someone that it doesn't matter if you doesn't matter if you don't have any of them right now, you can start TODAY regardless your age INVEST and change your future! investing is a grand choice I made! .
Question - the 2021: 2018 price comparison, the price of the house (numerator) was reduced from 5 to 2.5cr (assuming 100% increase in 3 years), the rental increase per annum was assumed as 10% so why was the denominator i.e. rental income was updated from 15L to 13.5L? Over 3 years there should have been 3 decrements of 10% each, so rental income would be 1,093,500 (~11L) in 2018.
The logical explanation still remains the same.
Exactly.... I was going to write the same thing and then I came across your comment.....
Morgage* 3.5%>>>>>>>>11%
Setting apart all the financial reasons, at the end of the day we are all emotional beings, we all need a house that makes us feel at home and at peace.
In Bengal household we have a saying "Mati Sona, Sona Mati" means Land is Gold, Gold is Land.. Instead of buying realty sector buying physical thing it will appreciate but better..
There is also maintenance cost which is equally increasing at a rapid rate. So in one year if I am spending 5L to maintain the house including insurance cost for a house of 2.5 cr then the cost will atleast increase by 10% so overall growth has to be adjusted with maintenance cost appreciation.
Making money online, living in Tier-3 cities (200km from Delhi), built our own home in the posh area having park facing view, never got any loan, thank god I am not in this race. Watched the video just for learning purpose.
The biggest problem with real estate is liquidity, that's why I hate it. When you want to sell real estate quickly it will never get sold at the market price and when you want to buy it, you have to pay the premium.
Feedback appreciated
Wanting more info and insight?
WatsApp the number above,⬆️⬆️
Endeavor to reach out
Except for the positive that you can build it modern and in a particular was to suit your lifestyle, but when you want to sell it....duh....in a hurry....people will ask for extremely low prices knowing you are in a hurry. Not like gold where you ca instantly convert it into cash. And when people buy property its complex. They will have 1001 suspicious questions which you wont like....so much paperwork and checking....they can find fault with everything if they want to.....then you will have to hire advocates to check the paperwork and agreement etc form your side else they will put a clause where they pay you advance and then the deal stands moot.....If your planning to ever sell it....NOT WORTH THE HASSLE.
The price of the house never goes up. Land prices do. The building always looses value even if you maintain it. The land is usually outgrowing the deprivation of the building
That's wrong. In Hyderabad, Bangalore, Delhi, Chennai and Mumbai....land prices have stalled in the last 5 years.
you always need one house that you can call your own.
*depreciation?
Correct. I have seen land and house hardly at a difference of 20%.
Land is the one which gets easily encroached and fally into disputes
I totally agree. Actually, i am planning to buy a house in Portugal. In central portugal, which is extremely beautiful, I can buy a huge house with enormous garden for less than 20 lakhs.
One simple reason to own a house: You don't have to ask anyone to put a nail in the wall ? ...and there are various such reasons ...
if you can't enjoy money, then all this money sn't worth it Buying a house is many times a emotional decision but if you think then its practical too. For example: You have spoken of early retirement in many of your vids. So if you take one, then stay in you house, meditate or educate..at least you will have a place to settle down easily... :)
Agreed! Every luxury has a price and people save n invest to get those!
Hey ! To be honest
There are affordable projects that can range from 20lakhs to 60 lakhs they provide you atleast a shelter and after all they are not that bad!
I live in ahmedabad there are affordable 3 bhk apartments from 50lkhs
Very true
Living in own accommodation can never be investment
That’s emotional reason again…
My grandfather built a house for 3 lakhs (land-1acre & then the construction of house in almost 10k sq feet area) in around 1980s, I don't know what the worth might be now but it has been my home from when I was born & it gives us a sense of security that no matter the business goes up or down we will always have a place to stay, to come back to which is priceless. If you have the money, you should always build a house, it will help your family for generations to come!
Thanks
14:16 this is actually a pretty good map of texas.
xD
Lol
“You can explain this to your parents and sound smart “ .
My parents : “don’t show ur stupid calculations , this is how the world works . Jump in the well “
Hahahaha...true
💯😂
True...
Mere pas parents ka 1.5 cr ka Mumbai mein house hai.
&
Salary 20 thousand
Bank Account mein sirf 15000
No FD
No any other investment
Ghar ka monthly expense 15000
No jewellery nothing else.
Just old house but it worth 1.5 cr
Ab isko agar hum sold out karengein and Kisi aur jaga
Like Thane mein acha bada Ghar buy karengein 70-80 Lacs/approx toh humare Pas
60-70 Lacs Cash Save hoga & we Can invest freely anywhere at anytime. Become Rich Over-night
BUT
Parents don't understand these things ☹️
@@sanjaykartari6835 become rich overnight lol..
.
same here
Another option is to buy or construct semi-commercial property with shops on GF rented out and house on upper floor.
Anything can be done in India. In Karnataka, semi commercial properties are very common. There are millions of them in Bengaluru city itself.
Pay EMI's only from Investment Returns , wowwww....
Great analysis 👍
For me, U r the first youtuber who informed viewers to watch @ 1.5x speed..
Thank you :)
Keep up the good work.
I don't have the money or the necessary income to buy a house. Yet, I watched the whole video due to the amazing presentation! Great job mate!
Investors who buy stocks typically do so for one of two reasons.
They probably believe that the price will rise and allow them to sell the stock at a profit,or they intend to collect the dividends paid on the stock as investment income.
Of course, some stocks can satisfy both objectives, You should work with an expert.
Who would you endorse ? been looking out for one.
I work with TAMARA DIANE HAGAN. her signal helped me make 650k profit within a 3 months.
Thanks. i look up the name Tamara Diane Hagan and i found her website. will drop a message soonest.
Noooo akshat, you have to reduce rent by 10% also for 3 years so since we're comparing 3 yrs earlier, the correct denominator should be 10.94
Exactly. And he's conflating rental yield with asset appreciation as per convenience. Plus, no bank will lend you 2 CR to invest in mutual funds. But they'd happily do that for a house.
Yes the video is helpful..but the real reason ur getting the like from me is your smile everytime you explain :)
Your last point was one of the most sensible thing I have ever heard. Pay for the EMI from your investment returns and not directly from your salary. That's very much true. I think twice before even getting an EMI of ₹2000 on my credit card. Because EMI are always a source of headache if you don't have an income source. In my opinion we should try to finance EMIs from investment returns as much as possible. Also definitely buying a house for crores of rupees is sheer madness. With high paying private sector jobs, you can't guarantee that you will make same amount of money for the next 30 years. You won't even know if you would stick in that profession for the next 30 years. Real Estate prices in India are super inflated and not affordable by any salaried person.
If you are paying some X amount as rent, for Y years. and the X amount increases by Rs. 500 each 11-month rent cycle and your landlord keeps you hardly 3-4 years in that house post which there would be a Rs. 2-3 k difference between the actual market rent and the increased house rent of the same house hence landlord wants to rent his house to another person with a new agreement.
Now, if you have purchased that house, the EMI would be around the same Rs. X or a little higher. If you want to relocate to another city resale it and you can always resale at a higher price than the initial buy price.
The resale price only drops if there is a major change in the zone, development work, local govt body policy changes or else it's fine to purchase a house.
Most of the houses in Noida have become vacant after Corona so don't live in assumption. My landlord is not calling me for two years to increase the rent.
@@rajsingh-lr3nd Same in Pune. I rent in Pune. After visiting 5 houses to rent, the landlords were repeatedly calling me to enquire if I was interested. Few years ago, it would never be the case.
Ha ha which world you are in Bro ?
Always higher value while resale ? You probably never sold a house in Bangalore it seems it's such a big headache and you have to sell it for loss in most cases .
For retail investors selling is big issue you will loose money in most cases
@@rajsingh-lr3nd Isn't a pandemic a wholly unexpected crisis? I understand that it's not useful for landlords at this moment, but then what will the situation be after 10 years?
@@JR-ee4xf agree but Modi govt making difficult to use cash, it only shows that no one can easily use cash, in white economy people will purchase based on loan eligibility. Our GDP to real estate price is mismatch. Read Sourabh mukherjees book u will understand. Probably it good to have one house just to stay not great for investment anymore. Real estate price may not go up but may stay same level or bit high. New generation people do not want to buy real estate rather they want to invest in MF, gold, stock market, bitcoins, commercial real estate.
My father is a real estate agent, he always tells me about the life cycle of the cost of a house or land. It grows pretty rapidly at first and then the growth dies down to a halt.
Your father is dalal
@@SandeepKumarIaspaper wow what a grown up you are.
Watch the movie- the big short... You'll see how right was your dad💶 it's called market bubble
@@SandeepKumarIaspaper i wii bet that u will always loose money on share market
@@nitrowolf17 I watched it movie but I didn't get how it fall
Like everything you do, I believe this channel is also meticulously planned for many years. Your channel is blowing up Akshat! and rightfully so.
Thank you so much :)
He's the Professor from Money Heist. Everything is as per plan :p
@@nishilbright2007 good one bro
@@AkshatZayn wtf thats so cheap in goa, my house in dehradun is worth around 4 cr...its better to invest in goa i think
@@AkshatZayn bro i have to invest around around 1 lakh per month at the moment i am investing in mutual funds....is there something where i can earn 1 cr in 4 years..???
U HAVE A CLEAR EDGE OVER OTHERS BRO COZ U GIVE MATHEMATICAL ANALYSIS TO THINGS...WHICH IS SUPER IMP.
Your advice to buy a house not from your salary income, but through your investment income is marvellous and reasonably accurate.
Calculation mistake: at 10:30 timestamp, when calculating rent back in 2018, he need to consider 3 years and 10% increase. Which means, 11.3L at place of 13.5L.
13.5 will be when you reduce rent increment of only one year, not compound of 3 years. Though logic still make sense with that number as well.
Correct me if I am wrong.
Rent doesn't increase 10% every year. At max it will increase 5% in 2-3 years. Renters will find lots option. No one will stay in a place where rents grow at 10% every years.
Mistake is there, but no one stays for 3 years if 35 % hikes in 3 years compounding
@@hoshiyarchand1996 😂😂😂Right
@@gauravdubey6110 fir bhai!! Apna naam hi aisa hai
If not 10, it should be 7% compunded reduction for 3 years to be realistic
The last point you said was the best advise if someone focuses on that! I keep saying this to my wife.. we will buy our house (for emotional purpose) when our investments can pay for our EMI.. then we are very close to achieve financial freedom! glad you said it too!
Once financial basics are clear to us, the conclusions do match in the end. Naturally.
Bhai 30000₹/month ki EMI pay karne ke liye investments se hone waali income ka minimum 360000₹/year hoga.
Aur aise mei toh 36 lakh invest karna hoga aur uspe har saal 10% per year minimum banaane honge for long term woh bhi post tax. Aur yeh toh minimum hai just to buy house from interest on investments. Practically dekha jaaye toh zaada investment karni hogi aur extra profit bhi banaana hoga for other life issues.
Ab aisi income banaane mei toh budhaapa bhi beet jaayega. Kyun bhabhi ji ko jhoothi umeed dete ho. Seedhe seedhe mana kar do.
This HUL PE analysis reminds me of saurabh mukharjae. He's the guy i admire a lot for his achievements. Same I feel for you as well. Finally someone is making true content without having any hidden agenda behind it. I hope you continue doing this.
Thank you!
Without any hidden agenda? Hang on 😀
@@arindamdutta9371 can't comment on whole TH-cam community. But most youtubers I see, only care about views without even caring whether the content they are producing will help consumer in longer run or not. And it's very difficult like to take a unbiased stand on big giants like credit cards companies like akshat did in one of his videos. I really like that.
@@prayagrajagrawal9050 Time will tell 😀
Just hang in there for a few more months 😀
@@arindamdutta9371
I agree to your point that nothing is done without an agenda. But you cant deny the fact that content of this channel is worth listening to. Just like Valuetainnent.
3.5 cr starting price in Goa. Thanks for posting this. Saved me time and lots of day dreaming.
Lmao
I have been a strong believer of buying commercial property rather then buying property for personal use.
Very well explained, all this makes sense.
Subscribing your channel
I was looking for the key point when is the right time to buy a house. And I got it. When I am able to cover the EMIs with my investment returns. That's brilliant advice. Thank you Akshat.
Every time I watch this channel my knowledge level increases. Thank you Akshat.
if the housing prices double, why would the rent still go up by 10% ? People generally perceive rent as a reflection of the price of the house.
This happens in mature economies where it’s only white money is dictating house prices.. india, we are talking about 50:50, 60:40, 70:30 ratios depending upon geographical localities , this would distort the returns % ages
Rent can only go up as fast as salaries grow
@@crococrash Also demographic who pay rents are fixed, just because of low rents number of tenets increase. But if rents do increase tenants will start looking for lower priced rentals. Also as the price of house increases so as property taxes. Then you have to do maintenance of the property. If house prices increase too much that would become election manifesto. There are talks of govt's moving to central bank digital currencies, your networth will become a row in govt run database server would be difficult to use black money in those circumstances. Sad thing is if housing market goes down then it will take down everything.
Really Superb vedio brother. Iam From Hyderabad. My salry is 40k per month, age 32. Scratching my head from 2 years to buy house but rates are too high nearly 1 to 1.5 crore. This vedio opened my eyes. 👌👌👌
Akshat seems like the guy next door and easily approachable person despite being so knowledge
Great Video Akshat for 2021 time frame. It makes super sense for me. My family members are pursuading me to buy a house in bangalore to earn rents in return.. We already own a house in bangalore and we are paying EMis for 5 years. Now, that I saw your video, I can explain my family about return on own house in terms of P/E and convince them about why I shouldn't own another building for renting purpose with massive EMI at the age of 38. Unfortunately, I am late to learn about the power of stock market to generate long term wealth. Nevertheless, I am learning from your channel and other channels about stock market and am picking low value stocks to accumulate in this massive bull trend.
Cheers,
Sriram
I don't remember the last time I commented on a youtube video, or if I ever did in the first place. However, could not resist doing so here, because you are a rare find! So much of inspiration and knowledge to draw from each of your post. Thank you, seriously!
Seriously man
Informative video. Thanks Akshat 😊.
P.S.: On a lighter note, that India Map needs some rework🤣
Haha, true
Ques- Won't PE ratio decrease now- because housing rate increases by 5% and rent increases by 10%. So a decade later PE ratio (33*(1.05/1.1)^10=20) is again in favour of housing rate jump. It might not increase by 30-50% like in 90s/00s, but it will certainly increase by more than 10%. This explains the concept of cyclicity
5 years back i sold my ancestral property for 3 crores and bought 180 acres of undeveloped agricultural land in south india near western ghats for 1.8lakhs an acre. Currently i sold 30 acres of the land for 3crore at the cost of 10 lakh per acre. I get an annual income of around 2crore non taxable income from 150 acres. Cheap agricultural is the way to go but with good documentation.
3:47 there is a big difference between so called research papers and reality, while research paper says growth rate is 5-6 % , reality is that a 2 BHK house which costed 40 lakhs in say 2020 , would cost around 50 lakhs to buy now . There is also a difference between buying and selling rate of house, so while for a person who wants to buy a house the cost of house keeps going up drastically , but that doesnt mean that when as an individual you want to sell a house you would benifit in the same way - on contrary when you are planning to sell a house as an individual you would have to wait for long to get a good price.
A friend of mine bought a 3BHK flat for 25 lakhs , 5-6 years later when I wanted to buy a flat , the cost of 2 BHK flat in his building was 50 lakhs.
Therefore reality is that , its always better to buy a house sooner than later , because the cost of house espcially in India will always keep going up and more you wait , the more yoiu will pay for lesser space & facilities.
however this doesnt mean you jump and buy a house blindly , you should always do your due diligence while asking these questions, where do you plan to settle. are you looking at the house more as an investment ?, how comfortable are you with the loan amount and loan period etc
Bro location matters a lot too, and you are being very specific . If something booms up from 2020-21 it doesn't mean it will keep increasing till eternity right, maybe it will stagnate for the next 7-8 years.
My parents bought a house in Nashik in 2014 and its price hasnt increased at all. But I do agree that some sort of property ownership is nice if you have done your research
With the salary a common man gets, it's impossible to buy a house in India. Great video!
So many uncompleted and empty house projects yet people are not having a single house and living in rent it's just crazy
Yes notebandi demonitization created this situation
@@vannuvilaiti1340 It was like this even before demonetization. It's just the salary structure in India is so low.
Can you make a video on Fractional Commercial Real Estate Investing which is a new concept in India? I was reading some articles of it on YourStory, livemint and startups like strata prop, hBits, etc are allowing people to group together and invest in commercial real estate without having a high capital
Are you talking about REITs?
Are there actually legitimate start ups who lets you enter this instrument?
@@pallabbandyopadhyay6856 REITs are already listed on stock exchanges. I think @Amaan BG is talking about different way of investing in commercial properties. They create an SPV which is like a pool of funds handled by a Trust. It's like crowdfunding a commercial property and the Rent that is earned is distributed to the investors. Earlier it was possible only if you had large sum of money to invest ,but now with these startups the ticket size has reduced to about 10-25L.
Its a sham, don't invest
@@jayantkanugovi6052
Can you name a few REITs that are listed so I can check em out?
@@pallabbandyopadhyay6856 Embassy Off.REIT ,Mindspace Busine ,Brookfield India
20% of channels provide 80% value on internet. This is true in this case as well. Hats off akshat to make such analytical videos & not opinionated. My feed is getting more & more productive.
I think the point you make is buying a house does not HAVE to be so important. Thankyou for the alternative.
I have different understanding for this topic:
1. 5.6% is average growth rate, there are places where the growth rate is more than that, and places where growth rate is less than that.
2. You are not only getting 5.6% increase in the price of the house but also rent. Which is about 1.5% to 3.5% of the house value (this is average in india, you can get better or worse returns depending on the place).
3. Majority of the population is shifting to urban places, so in the long term houses in those particularly developed places is going to increase in value.
4. It is a very good asset, because chances of a physical asset going to zero is almost impossible, until and unless something major take place in that particular.
Now invest in the house when you have excess cash or that you can pay the loan amount within few years.
Always have an emergency fund and health insurance before making a major purchase.
If you have excess of cash, you can also become a builder.
I can get what you're trying to say, however, what you're talking about here is commercial property in tho video Akshat has discussed about owning house for personal use only that means, you would not be getting any rent because you're staying there.
And, the public is moving towards urban area is true, still you would not sell your own house when you want to make investment, it's because you need money, and you don't know what would be the market condition when you're cashing your house.
@@tusharpatki317 yep your comment makes more sens
The information you are missing is market participation and asset demand.. equity markets in India are very small and participation is extremely low.. so the stocks will be under valued no matter how good they perform since there is no demand.. but housing participation is almost 90%.. anyone who had money wants to hold in real-estate value..so the value multiplier will be much higher in real-estate.. fundamental analysis is not applicable to real estate as it's has infinte lifetime.. so a 10 year fcf and growth factors don't hold good..
You nailed it! Buying real estate as an investment is dated strategy.. Buying a house to make it a "Home" is recommended. Many people need a place where they feel safe, comfortable, and spend time with loved ones. You cannot put a price on that.
Wonderful video. Thank you Akshat!
Thanks for your feedback, don't forget to hit the subscribe button. Reach out for enlightenment, tips and guide, I have the best investment plan for you ✉️..
He gave a gem of a idea! !
Use 2nd Tier Cities 🙂
I just subbed... Ty TH-cam recommendations
Back in 2008, I was working in Capgemini Mumbai office and I was living in Airoli. There was a gated community near my room, Yash Paradise. It was newly constructed at that time and the price of a 2BHK was around 12L to 15L. Cut to 2010, I was relocating to Bangalore. I casually asked the price of a 2BHK in the same gated community and found that it was around 50L. Now, the price in the same building is close to 1.5 Cr for a 2BHK. So, guys it is up to you to decide whether you should invest in housing or not.
Thanks for your feedback, don't forget to hit the subscribe button. Reach out for enlightenment, tips and guide, I have the best investment plan for you ✉️. ...
Nobody sells at asking price. And in any case, they never sell but religiously keeps increase in value. And that value is only perceived value.
I would rather say invest in land instead.....
I live in Yash Paradise, we bought the flat for 11 lacs in 2004. Currently at 1.4 cr
investing the same amount (12L) at the same time i.e. 2008, in shares, say TCS or infosys, their value would have been 2-2.3 crores today. You can calculate using historical data.
My dad HEAVILY disagrees with you haha. Good to see different povs
Yep same with my dad
I guess all dad's stand together on this one
I am with your dad.. I feel we should have home ..
Ur dad is ryt bru
Now real estate growth is in outskirts plots which may be in future grow more than any stocks that is the hope for real estate
OMG how can I express my happiness to u?
ur such a good person giving such quality information. within 1yr, ur channel will also become a multi-bagger in terms of subscribers. 😊
Thank you :)
@@AkshatZayn haven't you bought a house sir
I like your analysis and for those who does not own a single house I suggest to buy at-least one house for yourself because same house or apartment would cost you more after few years if you don’t buy now.
I agree house does not give you returns if you stay or apartment price will not increase after you bought but the point is it will cost you more and more later if you want to buy. Let’s say You will invest in stocks and wait for few years to make some money and at the end what you will do? You need to buy at-least one house right? By that time same house would cost you more + add the rent amount of all these years you paid. It will come to same point.
Here's my specific case and m sure a few people, if not a lot, are like me.
1. Me and husband came to US 10 yrs ago for MS
2.took education loan both of us
3. Started earning salary
4.fully paid off loan in 3 years
5. Started saving for a 2 bhk apartment in Mumbai in prime area (caeser road, andheri west) where we will live after coming back to India for good
6. Money saved 2.5 cr.. Bought a nice 2 bhk for 2.25 cr
7. Right now its on rent and we are still in the US, will go back in another 4 yrs or so
So in our case we bought ready possession flat
The builder was trustworthy
The building is road touch with excellent connectivity
It goes on rent immediately
So in my opinion its not binary to buy or not to buy.. If you do as we did it still works out great.. After all each individual case is different
13:30 Always buy ready to occupy houses even if it costs higher.
Yeah even gst is not applicable on that purchase
I think a more practical approach for most would be to plan a certain percentage of the EMI to be covered by the investment returns. Aiming for a straight 100% (after paying the down payment + taxes, which would deplete the existing investment anyway) is attainable for someone who is already wealthy, rarely a first time house buyer.
I am listening these arguments since 2007-2008 and believed firmly. I read enthusiasticaly all international financial experts how realty in India was ridiculously overvalued and didn't buy for long.
But now I regret it. When I count all the theatrics of landlords and the mental trauma caused by it, owning my own abode definitely sounds cheaper. There has been time in my life when dealing with the boss in office was much easier than the dealing with an uneducated, greedy and mannerless landlord.
Due to these cumulative reasons people buy homes even though all points raised by you are technically correct.
If landlord’s are the soul reason for your regrets you should have opted for flats or independent rental property
100% agreed,
Thanks for genuine advice.
you earning trust by speaking reality.
Real estate market is already at 10x to real coasting.
House or flat prices are out of affordability of 70% class people in india who earns below 50,000 to 70,000.
Why to buy a house if you can get 65 lakh duplex ( in vadodara) on rent of 10,000.
You can earn multiple returns and financially stable if you learn proper investing.
Thanks for your feedback, don't forget to hit the subscribe button. Reach out for enlightenment, tips and guide, I have the best investment plan for you ✉️...
Hey Akshat, really fantastic suggestions for people who want to buy a house. I idea is really tough to achieve. EMI from investment return !!! 😀😀😀
The suggestion for buying a house only when you can pay EMI with your investment returns seems a bit too far fetched...!! Suppose you have a EMI of 25k/mo that's equal 3lacs..to generate a return of 3lac rs at the rate of 10% you need to invest 30 lacs.. (post tax)
+Down payment 20% minimum and taxes 6% for the house....
By this logic the common man should never buy a home.. especially the middle salaried class...
Right, it does seem far fetched.
my parents keep asking me to buy property in india for long term and renting it out. I am in usa and here the emi of the house is lesser than what i can get for rent. so its a win win. hence its easier for me to buy here vs india.
@@budfox you got a good deal. Interest rate is low in USA too but in india it will go up as RBI increases repo rates due to high inflation in india
@@budfox we have costly capital 😭😭
@@kaustubhraizada well actually the capital is not costly if you think about the margin between inflation and cost of home loan. In india it’s at 7% home loan vs 5.5% inflation (2020) compare that to USA. Home loan 3.5% vs inflation 2% (2020) . So the delta is 1.5% in both cases. Of course there are multiple factors to consider. Like in india because of higher inflation it’s becomes cheaper to buy now and playback in later years due to inflation making it easier to payback fixed loans.
It feels this analysis is exclusively focused on NCR, suggest u also consider the market dynamics of other metros especially places like Bangalore/ Mumbai
Yess true the average rental value I get is not 1.5lacs rather 2.5 lacs in mumbai city...Mutual funds too are not always giving 12-15% return as in my experience it gave me 5-6% return... sometimes even negative value...Property gives medium risk medium gain[Better to be stable]
@@janmejaypandey2424
agree.
I bought a land in Shamshabad in 2008 for 70 lacs and after 13 years it may be worth the same.
And I also bought land in Sainikpuri, Hyd by paying 19k/sq yd when the best offer was 14K/Sq yd; all white and paying taxes for 19k/sq yd. Now this land is going for 50K/Sq yd. Yes, I do not have P/E because it is land.
He is just giving one perspective and those calculations are hard to make. He should used some use cases.
Now, his talk is more focused on buying apts/villas which are more than 2.5 cr. This is a very small segment of population I believe.
It’s worse in blr/mum
It's same in mum
@Akhil Nemalapuri how much is it worth now ?
Incorrect calculation. While calculating the P/E ratio for 2018, you halved the price of the house but reduced the rent by only 10%, instead of 10% per annum (by your logic rent increases by 10% every year, hence you should have dropped the rent by 33.1%)
My mom got super rich by buying houses. Whatever she purchased is now 10X within 10 years.
Houses can be assets.
There are some regions which are very much capable to 2-3× your money but it's really rare and there's such region in Thane Maharashtra.
After watching few of your videos, I am seriously considering sitting down with a pen and paper and go through all your videos and note down all the beautiful logics that you provide....really some top notch work man
That is what I am doing...not done yet
You are young Robert Kiyosaki🤟🏻, I would love to learn from you how to become financially independent in next three years. Please Create a separate playlist on this particular aspect.
It takes years to achieve fire unless you have already started the journey or your income is exceptionally high compare to expenses. Read up.
Robert Kiyosaki is a scam... You cannot be financially rich in India
Robert kiyosaki is a fraud
Ive been flipping properties from 3 years and made an avg of 35% per year even in the covid times. This examples is like taking one avg stock and talking about its growth rate. I am an active trader, investor in stocks too. But nothing gives peace of mind like a real estate investment. One needs to understand different asset classes.
flipping properties is different from buying a house mate. You need to have real skin in the game, paying 1cr to own vs paying 10l to renovate a house and sell is not the same. You couldn't have given a worse example to contradict him.
@@amar19961 well on the contrary bought a house in 2015 end and holding it still. CMP is 130% my BP. Like i said I can give you endless examples of good and bad in both real estate and stock market. At the end of the day its about the investor.
@@pvvv888 so when you say flipping properties does it mean you buy them or act as a brokerage firm for renovation and sales?
@@amar19961 buy, hold, sell
Please could you create a video on how to start with buying commercial properties with all details.
Thanks for your feedback, don't forget to hit the subscribe button. Reach out for enlightenment, tips and guide, I have the best investment plan for you ✉️. ...
Who wants to pay rent for the rest of one's life...owning a home is one of the best pleasures In life... You don't answer to anybody..... You own that place ... It gives you a sense of pride... That you've achieved something .... Not evething is about money my friend.....
Growth of housing market and growth in house prices are two different things.
you are the first commentor who got it !
Buying a decent house and struggling in the initial 2-3 years paying housing loan EMI is the best decision I made in my early 20's. All this calculations gyaan by youtubers go out of the window once ground realities hit you.
True, same here buy a house anywhere around a decent market or any college or industrial area you will always find people who want to rent.
@@hisoka7i Renting don't mean you are earning. You will get your principal amount in 20-30 years. And your asset is not liquid. So taking into account inflation, the maintenance you will be better of with investing that money in non-risky liquid assets. ✌
@@ujjwalthakur96 I have a 2bhk on rent to students. It's a 2 floor house. I get 20k rent every month. And 20k deposit for maintenance.
I make good returns
true af!
Lol what ground realities?
Legends say that Akshat, made this video to convince this parents that he'll not buy a house 😂😂😂jk
Mom, I hope you are reading this
@@AkshatZayn 😅😅
@@AkshatZayn pun very well taken Akshat, love your sportiness
😂😂
Just superb Akshat . Excellent presentation of the fact. Liked so much. Thanks enlightened me.
Feedback appreciated
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I watched your video about inflated CTC ..I liked everything about the video. The way you talk .the way you represent..proper research ..so following you since then ..keep up the good work
buying house is definitely a emotional decision just like buying gold , however that will never ever change in india hence property prices will never come down can u buy stocks worth 2 cr and spend sleep less nights thinks about markets up and down.. also renting scenario is different in Indian compared to abroad ..imagine ur house owner asking you vacant the flat in just 6 months of you moving coz of xyz reason unlike abroad where there is long term lease like 10 years and so on
It's 9 PM, I open TH-cam and anticipate a new video from Akshat at the top of my recommendation.
TH-cam's Alogo to me: Hitesh, you're so predictable! 😀
Haha, thanks for the support
At 10:15 you reduced only 10% in rent for 3 years. The rent in 2018 should have been 11,50,000 approximately assuming 10% compound growth
Happens when you are eager to prove the point.
@@AmanDeepSingh-xe9of ha ha
Exactly
Rent will be lesser than 13.5 L as 15 L has to be reduced by 10 percentage for 3 years (from 2021 to 2018)
I have been telling the same naala analogy considering the living situation in general but people don't like to hear it. Too much emotionally invested to think clearly. Anyway spot on analysis.
Very important insights. Thank you very much, cleared my head to a great extent.
The growth rate of real estate in India may seem crazy, but what’s even crazier is what has been happening to real estate in the USA in the past year and a half… startling and worrying figures 😬
What is happening is it shrinking?
@@prateek19299 it’s experienced a big boom in the past months… nearly 20% rise in medium property prices across the states in a year.
Seems like the BIG short to me and the way it ended last time brought nothing but a huge financial crisis
@@kalashsharma4344 that seems unlikely to happen. The difference between what happened in 2008 and 2020-21 is that 2008 consisted of leverage in forms of mortgage payments that were not at a fixed percent. In 2020-21 the buying spree is because of the accumulated savings of people that would’ve otherwise been wasted on travelling, vacations etc. There is essentially no borrowing in the present case. The need for a home in a pandemic, combined with huge savings in 2020, along with rising lumber costs has caused the surge according to real estate expert estimates :)
@@shivkhakhar3273 I know bro it is unlikely just mentioned it for fun
Btw what are your opinions of half a billion bet against tesla by Michael burry also he has been suggesting signs of a bubble
Nonsense video as usual, i will never buy a house, i will never buy a car, i will never buy headphones...no thanks dude... I dont want a treasury of money in my 60s, i want a life full of memories and a good house to rest myself upon.
Exactly....what is life without making memories with family and having emotional investment. One day you have to die , you live only once .
This guy makes complete miser videos !
No one is stopping you from buying a car or house if you have the money to buy them. The catch is buying them with loans and and then stressing out the remainder of life to just payback those loans.
True , the emotional connect people have with their own house is incomparable, you can't live on rent for your entire life, and suppose you do imagine what rent you have to pay when you retire, all your savings and retirement plan will go in your rent , a home is a must.
@@durgaprasadreddy5033 The thing is, i would rather be stressing out on paying loan on my own house than paying rent to someone else and also worry about getting kicked out anytime a distress situation occurs, There is atleast light at the end of tunnel of home loan, at the end of paying that loan you get to keep that house of yours which you love and have memories in, while paying rent, there is literally no end, you just keep up that rent throughout your lifetime moving from one place to another on the wish of the real house owner, you pay money throughout your life have nothing to show for it at the end. Yeah you can surely do some mathematics and show that you are at a loss buying house or something but its okay, i am ready to take that loss for the feeling that you get in your own house.
@@hassanali-yi4bu It is easier said than done. For example, a house loan of 1 crore at 8% p.a. for 20 years accounts to an emi of 84000 per month. 84000 is a huge amount for an employee even with 1 lakh a month package. Instead the employee can rent out a similar property for 25000 a month and save remaining 59000 which can be invested in real estate or share market. Moreover the advantage with renting out is the employee is not bound to a particular location and can shift easily when a better opportunity arises in a different location/part of world
Wanted to point out a small mistake at 10:25, if you go from 2021 -> 2018, rent wont decrease by just 10%, it will be 100 - (100/110)^3 compounded over 3 years.
I live in the UK and have a flat in India - NOT for emmotional or investment reasons but just to live in my own house and have all the freedom and privacy and the feel of being in your very own house which you cannot have in a hotel, or with relatives....
House is an asset carrying emotions ❤️
That's for the first house.
Seems drawing (India's Map) is only one thing which Akshat can't do. :)
If the town is small, you never know there is govt policy or something that influences land/asset value change, the unique prime location doesn't remain as unique and as prime as it is 😀
Hitting like then watching the video because Im in love with your teaching style❤️
Some skewed arguments
1. You need a house to live.
2. Rent you pay, goes to landlord. EMI on loan (nearly 80%) goes towards paying off your Loan Princ (20% interest) ie building your equity.
3. Finally, you can leverage on a mortgage loan (20% down payment, 80% loan) and you benefit from growth on entire 100% (on stocks you will only earn on your initial investment ie 20% here)
I disagree on the general methodology you have used for comparing the real estate market to the stock market. Please don't get me wrong- I love your content and follow your videos to build knowledge on a lot of other things. Here's what I feel: Like the share market, there are multiple variables here. You can almost consider every city as a stock. Not all stocks will perform the same. Yes the overall P/E ratioexplanation helps give an overview of the average performance but it misses out on capturing on eveeything else. The housing scene in Noida, Delhi, Bangalore is rightfully located at the middle- near the national average.
But look at other geographies- which have promising growth in upcoming years (overall economical growth)
The likes of Jaipur, Ahmedabad, Indore.
Land prices in these cities (again we cannot and shouldn't look at any area in the city and expect phenomenal growth) have grown at amazing rates and continue to do so.
What are some of the variables that one could look at?
Masterplan 2025 for the city published by the development authority - It tells us how will the city expand, what are spaces allocated for near future
Upcoming Economic Zones- Just an example- Look at Mahindra SEZ coming up in cities like Jaipur which otherwise had no economic push and were majorly tourist driven economies. The surrounding areas continue to shoot. Even in times when the National housing scene may not look promising
I am not sure if I missed out on something huge which I may have overseen so I beg your pardon. But I think the housing scene is pretty similar to the stock market where rules of consolidation apply. In the end it's deep analysis and study that pays off.
Yes, you said right that every city is like a stock. Even, I feel there are lot of towns/cities where the housing market will grow exponentially in the upcoming years.
Land is completely different he is talking about flats
Most of the transactions you see in these regions are not on cash especially in land (upwards of 60% value is in cash, registry for only 40%). So that is not suitable. Also flats haven’t given good returns and the ones that gave good returns are expensive (back to starting of the video). Lastly on the methodology, Akshat is correct, he is explaining as P/E whereas institutions look as cap. rate (almost same), and the one property that WILL give good returns despite of being expensive, doesn’t have attractive risk/reward ratio NOW
@@Ash-gt1qw I agree to disagree here mate. Flats are in my opinion never a good investment option. The benefit you get by investing in such geographies is that you can get land at much lower costs (because these are up and coming areas within the city)
Apartments, condominiums or any unit that factor in only a fraction of cost as the land cost will anyways not give returns. And you will have to resort on rental income. Land on the other hand has speculative value (if the area is not developed)
@@NA-vt6mz Got it! Thanks for the clarification mate. Cheers :)
I don't think anyone in India would ever be able to cover their EMI's through investment returns. Isn't that bit unrealistic assumption? Those who have massive corpus would anyway buy it using cash.
He is referring to likes of his circle, we know 99% Indians do not pay taxes so they cannot afford to buy house in white money without loan
Why would they buy in cash when home loans are available at
Akshat's content is just "world class"💯
Thank you, Ashish!
So much of learning in very shorter period of time...sir thank you
Per capita income in India is just ₹ 1.6 lakhs in metros it increase to ₹ 3 lakhs.
Even a small 1 BHK Flat of 550 sq feet in Metro or top cities cost more than Rs 40 lakhs.
Out of ₹ 3 lakhs, maximum ₹ 1.5 lakh can be paid as EMI each year for 15 - 20 years.
If one divide ₹ 40 lakhs by ₹ 1.5 lakh, that comes to 27 years. Then there are regular costs like Society Maintanence, Common Repairs of Building, Property Taxes, Regular Upkeep if property which can cost upto 1 - 2% of the House price each year.