Rent vs Buy: The 8% Rule

This comprehensive episode of the Paisa Vaisa podcast features host Anupam Gupta in an deep-dive conversation with Amit Agarwal, the CEO and co-founder of NoBroker, to decode the complex Indian real estate market for 2026 . We begin by exploring the disruptive journey of NoBroker which started in Bombay back in 2013 to solve the massive problem of fly-by-night brokers and high commission fees that have plagued the property market for decades . Amit explains the critical math behind the rent versus buy dilemma that every Indian professional faces today, highlighting why renting often makes more financial sense because typical residential rental yields are only between two to four percent while home loan interest rates hover around eight percent . The discussion provides a detailed analysis of the Model Tenancy Act which balances the rights of both owners and tenants by capping security deposits at two months and establishing a hierarchy of rent courts for sixty-day dispute resolution . We also address the infamous bachelor tax and societal discrimination where single tenants are often charged a premium despite being high-value renters with more disposable income than traditional families . This video is a masterclass for anyone looking to understand the real estate ecosystem from property appreciation and wealth generation to navigating the strict rental processes of Mumbai versus the more casual documentation found in other major Indian cities

Key Takeaways

• The 8% Rule: Buying a home is often financially inefficient in India because rental yields (2-4%) are far lower than home loan interest rates (8%) .

• Commercial Potential: Investors can achieve up to 12% rental yield by targeting small commercial shops instead of residential apartments .

• Deposit Laws: The Model Tenancy Act aims to stop the "Bangalore trend" of high deposits by capping them at a maximum of 2 months.

• Bachelor Advantage: Landlords should stop the "Bachelor Tax" as single tenants often pay more rent and have higher disposable income .

• The Amenity Trap: Post-COVID luxury boom has pushed many into paying high maintenance for amenities they rarely use .

• Investment Zones: For 2024, Pune offers "great deals" for investors while the NCR market is currently a zone to be "most careful about"

From decoding your personal finances to demystifying business models, Paisa Vaisa delivers candid, insightful, and jargon-free conversations.

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