Rajesh’s 3BHK Lifestyle with a ₹2 Crore Portfolio

Rajesh is a disciplined investor with a solid mutual fund portfolio worth ₹2 crore. His wife, a working professional, adds to their financial strength.

Despite being able to buy a flat with a mix of down payment and home loan, Rajesh chooses to continue renting a spacious 3BHK. For him, liquidity, flexibility, and financial freedom matter more than the prestige of owning a home.

This isn’t about affordability—it’s about financial strategy.

Buying a House in India: The Temptation vs. The Reality

A similar 3BHK in Rajesh’s area would cost around ₹1.5–2 crore.

Here’s what that means in numbers:

• Down payment: ₹40–50 lakh (around 25% of his net worth gone instantly)
• Home loan EMI: ₹80,000 per month for 15–20 years
• Extras: Property tax, society charges, and maintenance

On paper, Rajesh would “own” a home. In reality, he’d lose liquidity, slow his investment compounding, and take on a long-term financial burden—right when his child’s education and retirement goals are approaching.

Rent vs Buy in India (2025): Real Numbers That Tell the Story

Let’s compare actual costs for a 3BHK in a metro city:

👉 Annual savings: ₹4.8 lakh (₹40,000/month difference)

Now, if Rajesh invests that ₹40,000 every month in equity mutual funds at 12% annual returns, here’s how it plays out:

• 5 years: ~₹34 lakh
• 10 years: ~₹1 crore

Meanwhile, his existing ₹2 crore portfolio keeps compounding—growing to nearly ₹5 crore in 12–15 years.

Scenario 1: Renting + Investing (The Smart Compounding Route)

By renting and investing the difference, Rajesh:

• Keeps his ₹2 crore corpus fully invested.
• Avoids long-term debt pressure.
• Enjoys liquidity and flexibility for life goals.

His wealth compounds faster because every rupee keeps working for him, rather than being locked in a non-earning asset like real estate.

Scenario 2: Buying the 3BHK (The Slower Route to Wealth)

If Rajesh buys the property:

• His portfolio drops by ₹40–50 lakh immediately.
• EMIs consume ₹80,000 monthly.
• Property appreciates at ~6–7% annually, reaching about ₹3–3.5 crore in 12 years—but remains illiquid.

👉 Bottom Line: Buying brings stability, but slows wealth creation. Renting boosts liquidity, compounding, and financial independence.

Scenario 3: What If You Already Have a ₹2 Crore Portfolio?

If you’re like Rajesh and already have a significant portfolio, you might consider one of these housing strategies:

1. Loan Against Mutual Funds

Borrow 50–60% of your mutual fund value without selling your investments.

• Pros: Your investments continue compounding.
• Cons: If markets fall, banks may ask for additional collateral (margin call).
  ✅ Best for: High-income earners comfortable with market risk.

2. Selling a Portion for Down Payment

Use ₹40–50 lakh from your portfolio for a home loan down payment.

• Pros: Smaller EMI and lower stress.
• Cons: You lose future compounding on that ₹40–50 lakh—which could have grown to ₹1.25 crore in 15 years.
  ✅ Best for: Those prioritizing emotional comfort over maximum returns.

3. SWP (Systematic Withdrawal Plan)

Withdraw a fixed amount monthly from your investments to fund rent or EMIs.

• Pros: Smooth monthly income flow.
• Cons: Gradually depletes your corpus and reduces long-term growth.
  ✅ Best for: Retirees, not working professionals.

So, What’s the Smartest Move?

For long-term wealth creation:
✅ Keep your ₹2 crore invested.
✅ Pay rent from your income.
✅ Let compounding work uninterrupted.

This simple discipline can help you grow your wealth to ₹5–6 crore in 12–15 years while maintaining liquidity and flexibility.

Scenario 4: Property Appreciation vs. Equity Growth

Let’s look at 20-year potential growth:

Asset	Expected CAGR	Future Value of ₹2 Crore (20 years)	Notes
Real Estate	6%	₹6.4 crore	Slow, illiquid, area-dependent
Equity Mutual Funds	12%	₹19 crore	High liquidity, diversified growth

Even if property prices rise steadily, equities still outperform in most cases—offering better growth, liquidity, and diversification.

Renting a House in India: Lifestyle & Peace of Mind

Beyond numbers, renting offers:

• Flexibility: Move or upgrade easily.
• No hidden costs: No maintenance, taxes, or repairs.
• Peace of mind: No EMIs dictating financial choices.
• Better lifestyle: More money for travel, experiences, and education.

Owning a home might bring emotional comfort—but renting brings financial freedom and lifestyle flexibility.

Should You Rent or Buy in 2025?

It depends on your goals, income stability, and priorities. Renting doesn’t mean never buying—it means buying at the right time, when it doesn’t compromise your financial growth.

For families like Rajesh’s, renting today means:

• Faster wealth creation.
• Stronger education and retirement funding.
• Future home purchase with confidence, not compromise. 

Final Thoughts: The 2025 Reality of Rent vs Buy

In India, homeownership is often mistaken for success. But real success is financial independence, not tying up crores in an illiquid asset.

A ₹2 crore net worth family renting a 3BHK isn’t “settling”—it’s being strategic.

Before signing that home loan, ask yourself:
👉 Will this strengthen my finances—or just my ego?

Because the smartest move isn’t owning a house—it’s owning your financial future.

Quick Comparison Table: Rent vs Buy in India (2025)

Factor	Renting a 3BHK	Buying a 3BHK
Monthly Cost	₹40,000	₹80,000 EMI
Annual Increase	+5% rent	EMI fixed (inflation-adjusted)
Upfront Cost	₹1.2 lakh deposit	₹40–50 lakh down payment
Liquidity	₹2 crore corpus stays invested	Portfolio reduced by 25%
Wealth Growth (10 yrs)	₹1 crore + compounding	Slower growth, funds locked
Property Value Growth	N/A	~₹3–3.5 crore
Flexibility	High	Low
Hidden Costs	Minimal	High
Lifestyle	More disposable income	Budget restricted