Nikhil Kamath, Who Once Disregarded Homeownership, Acquires His First House

Nikhil Kamath, co-founder of India’s largest discount brokerage, Zerodha, has recently surprised many by purchasing his first house, a move that starkly contrasts his previous stance on homeownership. Known for promoting the benefits of renting over buying property, Kamath’s decision has sparked discussions in the real estate community and beyond.

In a recent episode of his podcast, WTF, Kamath shared this significant update during a dialogue with industry leaders, including Irfan Razack, Chairman and Managing Director of Prestige Group; Nirupa Shankar, Executive Director at Brigade Group; and Karan Virwani, CEO of WeWork India. During their discussion, Kamath reignited the ongoing debate surrounding the merits of buying versus renting a home.

A Shift in Perspective

Kamath has long been an advocate for renting, often highlighting its advantages, such as flexibility and lower upfront costs. However, he acknowledged a critical drawback of renting during the podcast. He stated, “Of all the advantages of renting, there is one disadvantage: you don’t have foresight as to when you can move out of the house. Like, I had to move out of this house, whereas I may have liked to stay longer. Not having the nuisance value of having to move felt like it made sense to buy one.”

This comment suggests that even strong proponents of renting can feel the strain of uncertainty that comes with not owning a home. The desire for stability and predictability ultimately influenced Kamath’s decision to make the leap into homeownership.

Concerns About Real Estate

Despite his recent purchase, Kamath has not completely abandoned his skepticism about real estate. He expressed disdain for what he calls the “illiquid nature of real estate,” asserting that assets like gold could provide similar security without the complications that property ownership entails. He remarked, “I feel something like gold can give that to me. I hate the illiquid nature of real estate.”

In discussing the challenges of property valuation, he noted, “Places like this have fewer buyers. If 10 people here decide to sell, then everything is haywire, and the pricing is very arbitrary in nature.” This commentary highlights Kamath’s perspective on the unpredictability of real estate markets compared to the stock market, which he believes is more stable due to its larger participant base. He stated, “If in a certain company, one million people decide to sell, then it makes a significant difference.”

The Burden of Costs

Kamath also criticized the financial burdens associated with property transactions, particularly stamp duty. He stated, “In the stock market, I can buy and sell without paying 5% to 6% stamp duty.” This comparison reinforces his long-held belief that stock investments provide greater liquidity and financial flexibility.

The conversation turned to the profitability of buying property for rental purposes versus using it as an Airbnb. Kamath argued, “I think nobody makes money from buying and renting a place,” adding that with Airbnb rentals, “you do not have occupancy throughout the year.” This highlights his skepticism regarding the return on investment in the real estate sector.

Public Reactions

The news of Kamath’s home purchase elicited a variety of reactions online. One user commented, “If you’re wealthy, buying a home or renting literally does not matter!!” Another remarked, “Wow, finfluencers have finally realized something so obvious.”

Many individuals emphasized the emotional and psychological benefits of homeownership. One comment captured this sentiment perfectly: “Owning a house gives a sense of security and stability to the entire family. Apna ghar kaisa bhi ho, apna ghar, apna ghar hota hai (No matter how your home is, a home is still a home). And that feeling cannot be compared to any value of money.”

Conclusion

Nikhil Kamath’s decision to purchase his first home marks a noteworthy shift in his views on homeownership. While he has articulated the benefits of renting for years, his recent insights reveal a more nuanced understanding of the housing market’s emotional and practical dimensions. As someone with a net worth of $3.1 billion, Kamath’s journey toward homeownership may serve as a compelling reminder that financial decisions often blend with personal experiences and emotional needs.