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Builders have too many new homes on their hands.Thanks to a construction boom years in the making, homebuilders are sitting on more newly completed homes than at any point since 2009, when the market was reeling from the global financial crisis. Despite the hefty ready-to-sell supply, a sizable chunk of those homes may never be sold to regular buyers. That strange reality says a lot about the hurdles for would-be homeowners right now.Both builders and buyers find themselves in a tricky position. Prices have <a target="_blank" href="https://www.businessinsider.com/personal-finance/mortgages/home-prices-drop">continued their climb</a> in most of the country. Mortgage rates dropped steadily over the summer, but that <a target="_blank" class="" href="https://www.businessinsider.com/personal-finance/mortgages/how-does-fed-impact-mortgage-rates">turned out to be a head fake</a> — in the span of a month, the typical rate for a 30-year loan increased by almost a full percentage point, and could rise further. Throwing down for a starter home is about 45% more expensive than renting, a far wider gap than the historical average of about 15%, according to monthly expense data tracked by John Burns Research and Consulting. Builders, meanwhile, are luring buyers with some perks but are barely budging on prices. That's partly because these companies have another place to turn: the rental market.Given the strong demand for rentals and a tough sales market, some builders are choosing to convert for-sale homes into rentals or offload inventory to investors who specialize in single-family-home rentals. Opportunistic investors — mostly small and midsize players, who own the vast majority of single-family rentals in the country — are happy to oblige.Four walls and a backyard are still the bedrock of the American dream. For those who can't afford to buy a house (or don't want to right now), the only option is to rent. That simple fact gives builders some breathing room, but it also means that a glut of new homes may not deliver the price cuts buyers have been anxiously awaiting.A <a target="_blank" href="https://www.businessinsider.com/housing-market-outlook-forecast-mortgage-rates-homebuilding-inventory-prices-2024-2023-12">golden run for homebuilders</a> is drawing to a close. When rising mortgage rates <a target="_blank" href="https://www.businessinsider.com/housing-market-mortgage-rates-outlook-home-prices-affordability-wealth-gap-2024-3">trapped many would-be sellers</a> in their homes two years ago, builders turned out to be the big winners — if you wanted to buy a home, your <a target="_blank" href="https://www.businessinsider.com/house-construction-building-boom-last-hope-new-homebuyers-housing-market-2023-7">best bet was probably new construction</a>. One economist told me last year that builders were "the only game in town" in some areas. Builders not only offered a welcome alternative to the <a target="_blank" href="https://www.businessinsider.com/housing-market-ice-age-higher-home-prices-fewer-sales-inventory-2023-5">frozen resale market</a> but could cut deals to make their homes even more appealing to the average buyer: <a target="_blank" class="" href="https://www.businessinsider.com/homebuilders-turn-to-mortgage-rate-buydowns-as-affordability-sours-2022-12">Mortgage-rate buydowns</a>, in which the builder pays the lender up front in exchange for lowering the buyer's loan rate, can save a new homeowner hundreds of dollars each month.Now, even with the freebies, builders are selling homes at a slower-than-expected pace as buyers grapple with worsening affordability, sharp swings in mortgage rates, and general uncertainty — people would rather sit on the fence than leap into a market with so many unknowns. With slower sales across the board, the number of homes on the market has climbed. There were 108,000 finished homes for sale at the end of September, some 48% more than at the same point a year ago. There were 258,000 homes under construction but not yet sold, another sizable figure — at the same point in 2019, there were about 194,000. Builders surveyed by John Burns Research and Consulting said they had an average of about 2.5 unsold homes in each of their communities in October, representing a 47% increase from a year ago. In October 2021, they reported only 0.4 unsold homes per community. Some of this increase is by design. Companies are building more homes "on spec," or before they have a buyer, to shorten timelines and compete directly with the resale market. But there's no question that builders have hit a snag.The answer might seem obvious: Cut prices! But builders will "try a lot of other things first," says Keith Hughes, an executive at the housing research firm Zonda. "And we're not seeing drastic price drops virtually anywhere." Buyers may not be flooding the market, but there are fewer homes out there, too. The number of available homes for sale at the end of October, according to <a target="_blank" href="http://Realtor.com">Realtor.com</a>, was about 21% lower than in the same month in 2019. Builders looking to move their product lean heavily on incentives — Lennar, one of the largest homebuilders in the country, said that the average sales incentives per home amounted to $48,100 from June through August, compared with $36,400 a year earlier. Builders are also completing smaller floor plans to match the needs of cost-conscious consumers.Builders have another fallback: the rental market. Over the past decade, homebuilders have forged relationships with companies that <a target="_blank" class="" href="https://www.businessinsider.com/single-family-rental-investor-conference-buying-more-homes-2021-12">purchase thousands of single-family homes</a> and manage them as rentals — if a builder were looking to move a portfolio of homes, they might find a willing buyer in a company like Pretium, which owns nearly 100,000 homes, or Invitation Homes, which manages a portfolio of more than 85,000 homes. Builders have also started <a target="_blank" class="" href="https://www.businessinsider.com/wall-street-single-family-rental-build-to-rent-houses-finance-2021-7">developing entire communities of single-family homes</a> to be rented out rather than sold, a strategy known as build-for-rent. The idea is to meet the demand of renters who want their piece of the American dream — a home with a yard in a safe neighborhood with good schools — but either can't make a purchase or don't want to. Builders can sell to a guaranteed buyer willing to purchase in bulk or hold on to the homes and enjoy the steady returns of rental income. Given these advantages, the build-to-rent pipeline has become robust. D.R. Horton, the nation's biggest homebuilder, recently said it had about $800 million worth of single-family-rental property on its balance sheet, consisting of 3,140 homes and about 1,900 lots on which it can build more. Invitation Homes, one of the largest owners of single-family rentals, recently said it expected to purchase nearly 2,500 homes in the next couple of years from builders in places like Tampa, Florida; the Carolinas; and Houston.Owners of single-family rentals have been around forever, but large, sophisticated SFR companies <a target="_blank" class="" href="https://www.businessinsider.com/single-family-rental-companies-institutional-backers-homes-wall-street-2020-12">arrived after the financial crisis in 2008</a>, when investors began raising billions of dollars to pick up homes on the cheap. Now these companies represent a "new category of buyers that would really help a builder during a downturn unload some inventory," John Burns, of John Burns Research and Consulting, said in a recent podcast with Don Mullen, the CEO of Pretium. "And you're playing that out right now, you're already doing that."But big companies actually <a target="_blank" class="" href="https://www.businessinsider.com/average-americans-beating-wall-street-new-homes-real-estate-homebuying-2023-11">own a small fraction of all single-family rental homes</a>, and they've been much more selective with their purchases as higher interest rates have made it tougher to get strong returns on their investments. The <a target="_blank" class="" href="https://www.businessinsider.com/mom-and-pop-landlords-homeownership-rent-wall-street-corporate-investors-2024-7">most active buyers right now are small and midsize investors</a> who own anywhere from a handful of homes to several hundred. With builders sitting on more homes, these investors are sniffing around for deals."I think investors are more or less saying to themselves, we're providing a solution here for builders, and that solution is inventory management and getting out of inventory that otherwise they're having trouble selling," says Adam Stern, the founder and CEO of Strata SFR, a real-estate brokerage focused on single-family rentals and build-to-rent homes. "We're that exit option."Data from <a target="_blank" href="https://www.forecasa.com/">Forecasa</a>, a real-estate analytics firm, indicates investors purchased 3% to 5% of homes sold by builders in the past three months. That may not sound like much, but a year ago that number was closer to 1%. Some builders have recently been shuttling about 10% of their inventory to investors. Even then, these numbers may be undercounts, since some amateur rental owners may not be buying through the kinds of legal entities that tip off analysts to investor purchases."It may seem like a small percentage, but if you think about just the sheer volume of properties that are being moved, it's a fairly large number, especially because it's growing," says Sean Morgan, the CEO of Forecasa.Investors have mostly focused on Sun Belt markets like Nashville and Dallas in the lower half of the US, where new construction is most plentiful. Builders may offer a slight discount, but they get something valuable in return: homes off their balance sheets. Builders often take on loans of 12 to 24 months to construct homes — before time is up, they have to either find a buyer or get a new loan. Local and regional builders are more likely to feel the squeeze than a national company like D.R. Horton, which can afford to keep homes on its books longer. When builders are staring down that ticking clock, "investors are natural buyers," says Alex Offutt, the CEO of Business Purpose Capital, a capital provider for long-term investor loans. Builders don't even have to sell, though. Another route is to get a new long-term loan based on the rental income the properties will generate, then find tenants for the homes and wait to sell when the market is more favorable. Both Offutt and Ray Sturm, a managing partner of Tower1, which offers financing for residential lenders, tell me they've been having more conversations with builders and their lenders who are seeking out this option."They know if they work on a rental campaign, they've got an exit," Sturm says. "It's early, but it's bigger than I thought."This isn't the ideal scenario for most builders, especially since many aren't well versed in the minutiae of managing rental properties. But it could become another valuable off-ramp if they have trouble unloading homes.Most homebuilders are a long way from hitting the panic button. There's still a <a target="_blank" class="" href="https://www.businessinsider.com/us-housing-affordability-home-shortage-market-construction-population-cities-zillow-2024-6">national housing shortage</a>, even if there's a short-term oversupply in some places, and builders are <a target="_blank" class="" href="https://www.businessinsider.com/housing-market-ice-age-homebuyers-mortgage-rates-spring-real-estate-2024-10">looking ahead to the spring buying season</a> as the true tell of where things are headed. Their embrace of the rental market says more about the obstacles for buyers than for builders. Prices and borrowing rates haven't provided relief for those looking to make a purchase. People who already own homes are reluctant to sell and move up, which means they're not freeing up the starter homes that first-time buyers crave. Would-be buyers have nowhere else to turn but the rental market — Redfin estimates that the number of renter households is growing three times as fast as homeowner households.The housing market "is in limbo," says Selma Hepp, the chief economist at the real-estate data firm CoreLogic. "It's sitting on the sidelines. It's waiting."<a target="_blank" rel="" href="https://www.businessinsider.com/author/james-rodriguez">James Rodriguez</a> is a senior reporter on Business Insider's Discourse team.

How investors are about to profit from a tidal wave of new homes

<keyword id="6426359" type="General" weightage="80" keywordseo="pnb-housing-finance" source="Orion">PNB Housing Finance</keyword> on Thursday reported an 11.7 per cent rise in net profit at Rs 262.63 crore for the September quarter of 2022-23 on a modest rise in core income. The non-banking finance company had logged a net profit of Rs 235.21 crore in the year-ago period. Total income increased to Rs 1,683.43 crore from Rs 1,586.41 crore in the same period of 2021-22, <keyword id="47268" type="General" weightage="100" keywordseo="pnb" source="Orion">PNB</keyword> Housing Finance said in a regulatory filing. The core interest income of the Delhi-based housing finance company rose 6.5 per cent in the quarter to Rs 1,597.54 crore as against Rs 1,499.88 crore in the year-ago period. Total expenses moved up nearly 4 per cent to Rs 1,343 crore from Rs 1,295.21 crore. Promoted by the country's second-largest state-owned lender <keyword id="62034" type="General" weightage="50" keywordseo="punjab-national-bank" source="Orion">Punjab National Bank</keyword> (PNB), the company is engaged in the business of providing loans for the purchase, construction, repairs and renovations of housing and commercial properties. On the asset front, gross non-performing assets (NPAs or bad loans) stood at 6.05 per cent of gross advances as of September 30, 2022. Net NPAs were at 3.59 per cent. PNB Housing Finance stock closed at Rs 451.10, up 4.59 per cent, on the <keyword id="35140" type="General" weightage="50" keywordseo="bse" source="Orion">BSE</keyword>. SEE ALSO: <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/finance/news/rupee-gains-67-paise-to-82-14-against-us-dollar/articleshow/95113459.cms">Rupee gains 67 paise to 82.14 against US dollar</a> <a target="_blank" class="c-link c-message_attachment__title_link" href="https://www.businessinsider.in/stock-market/news/indian-markets-trade-higher-amid-mixed-cues-from-global-markets/articleshow/95113241.cms">Indian markets trade higher amid mixed cues from global markets</a>

PNB Housing Finance Q2 profit rises 12 pc at Rs 263 cr 

Online food delivery firm <keyword id="19901323" type="General" weightage="20" keywordseo="Zomato" source="keywords">Zomato</keyword> Ltd on Monday reported a consolidated net profit of Rs 175 crore in the March quarter on the back of higher revenue. The company had posted a consolidated net loss of Rs 188 crore in the same quarter last fiscal, Zomato Ltd said in a regulatory filing. Consolidated revenue from operations stood at Rs 3,562 crore. It was Rs 2,056 crore in the year-ago period, it added. Total expenses were at Rs 3,636 crore. The company posted its total expenses at Rs 2,431 crore in the corresponding period a year ago, it said. For the fiscal ended on March 31, 2024, the consolidated net profit was Rs 351 crore. The company had posted a consolidated net loss of Rs 971 crore in the previous fiscal ended on March 31, 2023, the filing said. In FY24, consolidated revenue from operations stood at Rs 12,114 crore. It was at Rs 7,079 crore. The results for the year ended March 31, 2024, are not comparable with the year ended March 31, 2023, due to the acquisition of Blink Commerce Pvt Ltd (formerly known as Grofers India Pvt Ltd) in June 2022, the filing said. SEE ALSO: <a href="https://www.businessinsider.in/stock-market/news/aadhar-housing-finance-ipo-allotment-how-to-check-allotment-gmp-listing-date-and-more/articleshow/110071990.cms">Aadhar Housing Finance IPO allotment – How to check allotment, GMP, listing date and more</a> <a href="https://www.businessinsider.in/sports/webstories/ipl-decoded-highest-individual-scores-in-ipl-2024-so-far-from-stoinis-to-kohli/slidelist/110008351.cms">IPL Decoded: Highest individual scores in IPL 2024 so far, from Stoinis to Kohli</a> <a href="https://www.businessinsider.in/tech/mobile/news/indian-smartphone-market-up-8-5g-smartphones-account-for-over-70-of-shipments/articleshow/110002512.cms">Indian smartphone market up 8%, 5G smartphones account for over 70% of shipments</a>

Zomato posts Q4 consolidated net profit at ₹175 crore

Auto components major <keyword id="21576080" type="General" weightage="20" keywordseo="Bharat-Forge-Ltd" source="keywords" meta.keywordsubtype="org" meta.entityname="Bharat Forge Ltd" meta.hostid="261" meta.entityid="Bharat Forge Ltd">Bharat Forge Ltd</keyword> on Wednesday reported a 77.8 per cent rise in <keyword id="20129249" type="General" weightage="20" keywordseo="consolidated-net-profit" source="keywords">consolidated net profit</keyword> at Rs 227.12 crore in the fourth quarter ended March 31, 2024, riding on higher sales. The company had posted a profit of Rs 127.74 crore in the corresponding period of the previous fiscal, <keyword id="19946643" type="General" weightage="20" keywordseo="Bharat-Forge" source="keywords">Bharat Forge</keyword> said in a regulatory filing. Consolidated revenue from operations during the quarter under review stood at Rs 4,164.21 crore as against Rs 3,629.05 crore in the year-ago period, it added. Total expenses in the fourth quarter were higher at Rs 3,843.55 crore as compared to Rs 3,469.05 crore in the same period a year ago. The Board of Directors at its meeting held on May 8, 2024, recommended a final dividend of Rs 6.50 per equity share of the face value of Rs 2 for the financial year ended March 31, 2024, subject to approval of shareholders at the ensuing annual general meeting, Bharat Forge said. For the fiscal ended March 31, net profit was at Rs 910.16 crore as compared to Rs 508.39 crore in the previous fiscal, it added. Consolidated revenue from operations in FY24 was at Rs 15,682.07 crore as against Rs 12,910.26 crore in FY23, the filing said. SEE ALSO:<a href="https://www.businessinsider.in/tech/mobile/news/google-has-silently-launched-the-pixel-8a-in-india-starting-at-52999/articleshow/109937286.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/mobile/news/google-has-silently-launched-the-pixel-8a-in-india-starting-at-52999/articleshow/109937286.cms" target="_blank">Google has quietly launched the Pixel 8a in India starting at ₹52,999</a><a href="https://www.businessinsider.in/tech/apps/news/google-wallet-launched-in-india-store-your-loyalty-cards-boarding-passes-and-more/articleshow/109941139.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/apps/news/google-wallet-launched-in-india-store-your-loyalty-cards-boarding-passes-and-more/articleshow/109941139.cms" target="_blank">Google Wallet launched in India – store your loyalty cards, boarding passes and more</a><a href="https://www.businessinsider.in/stock-market/webstories/aadhar-housing-finance-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/109919298.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/webstories/aadhar-housing-finance-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/109919298.cms" target="_blank">Aadhar Housing Finance IPO – Price band to risk factors, all you need to know</a>

Bharat Forge Q4 profit rises 77% at ₹227.12 crore

Air conditioning and <keyword id="17833175" type="General" weightage="20" keywordseo="engineering-services" botkeyword="" source="Denny">engineering services</keyword> provider <keyword id="21567326" type="General" weightage="20" keywordseo="Voltas-Ltd" botkeyword="" source="Denny" meta.keywordsubtype="org" meta.entityname="Voltas Ltd" meta.hostid="153" meta.entityid="Voltas Ltd">Voltas Ltd</keyword> on Tuesday reported a 22.75 per cent decline in <keyword id="20203162" type="General" weightage="20" keywordseo="consolidated" botkeyword="" source="Denny">consolidated</keyword> <keyword id="17985868" type="General" weightage="20" keywordseo="net-profit" botkeyword="" source="Denny">net profit</keyword> to Rs 110.64 crore in the fourth quarter ended March 31, 2024, impacted by higher <keyword id="18067946" type="General" weightage="20" keywordseo="expenses" botkeyword="" source="Denny">expenses</keyword>. The company had posted a consolidated net profit of Rs 143.23 crore in the same period previous fiscal, <keyword id="6354999" type="DOMAIN" weightage="20" keywordseo="voltas" botkeyword="" source="ET" sourcekeytype="COMPANY" meta.keywordsubtype="EQ" meta.aliasname="voltas" meta.entityname="Voltas Ltd." meta.entityid="12815" meta.seoname="voltas-ltd">Voltas</keyword> said in a regulatory filing. Consolidated <keyword id="17915033" type="General" weightage="20" keywordseo="revenue" botkeyword="" source="Denny">revenue</keyword> from operations during the quarter under review stood at Rs 4,202.88 crore as against Rs 2,956.8 crore in the year-ago period, it added. Total expenses in the fourth quarter were higher at Rs 4,044.90 crore compared to Rs 2,761.45 crore in the corresponding period a year ago. In the fourth quarter the unitary cooling products business segment revenue grew by 44 per cent to Rs 2,955 crore as compared to Rs 2,049 crore in the corresponding quarter of the previous year on account of a better product mix enhancement approach, the company said. The engineering products and services division clocked revenue of Rs 156 crore as compared to Rs 142 crore in the year-ago period, it added. Similarly, electro-mechanical <keyword id="18084086" type="General" weightage="20" keywordseo="projects" botkeyword="" source="Denny">projects</keyword> and services segment comprising both domestic and international projects businesses grew by 38 per cent year-an-year due to a healthy carry forward order book position, it added. <keyword id="21544478" type="General" weightage="20" keywordseo="Voltas" botkeyword="" source="Denny">Voltas</keyword> said for the fiscal ended March 31, 2024, consolidated net profit was higher at Rs 248.11 crore as compared to Rs 136.22 crore in the previous year. Consolidated revenue from operations in FY24 was at Rs 12,481.21 crore as against Rs 9,498.77 crore in FY23. The company said it achieved the milestone of 20 lakh <keyword id="21211630" type="General" weightage="20" keywordseo="AC-sales" botkeyword="" source="Denny">AC sales</keyword> in 2023-24. Voltas said its board of directors has recommended a <keyword id="18713200" type="General" weightage="20" keywordseo="dividend" botkeyword="" source="Denny">dividend</keyword> of Rs 5 per share of the face value of Re 1 per share for the year 2023-24 subject to the approval of shareholders of the company. SEE ALSO:<a href="https://www.businessinsider.in/stock-market/webstories/aadhar-housing-finance-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/109919298.cms" target="_blank"></a> <a href="https://www.businessinsider.in/stock-market/webstories/aadhar-housing-finance-ipo-price-band-to-risk-factors-all-you-need-to-know/slidelist/109919298.cms" target="_blank">Aadhar Housing Finance IPO – Price band to risk factors, all you need to know</a><a href="https://www.businessinsider.in/business/auto/webstories/top-selling-cars-in-india-in-april-2024-tata-punch-continues-to-dominate/slidelist/109909744.cms" target="_blank"></a> <a href="https://www.businessinsider.in/business/auto/webstories/top-selling-cars-in-india-in-april-2024-tata-punch-continues-to-dominate/slidelist/109909744.cms" target="_blank">Top-selling cars in India in April 2024 – Tata Punch continues to dominate</a><a href="https://www.businessinsider.in/tech/news/worldwide-tablet-shipments-grow-in-q1-2024-after-two-years-of-decline/articleshow/109876390.cms" target="_blank"></a> <a href="https://www.businessinsider.in/tech/news/worldwide-tablet-shipments-grow-in-q1-2024-after-two-years-of-decline/articleshow/109876390.cms" target="_blank">Worldwide tablet shipments grow in Q1 2024 after two years of decline</a>

Voltas net profit declines 22% YoY to ₹110.64 crore in Q4 FY24

Deciding whether to rent or buy a home is one of the biggest financial choices most people will make. It’s not a straightforward decision, especially when considering the rapid increase in <keyword id="21530105" type="General" weightage="20" keywordseo="rental-prices" source="keywords">rental prices</keyword> in some of India’s biggest cities. Let’s dive into how the cost of renting has risen compared to buying, and whether it's still worth it to rent or if it’s time to start looking at <keyword id="20879400" type="General" weightage="20" keywordseo="homeownership" source="keywords">homeownership</keyword>. <h2>Soaring renting costs</h2>If you’re renting in cities like Bengaluru, Pune, or Kolkata, you might have noticed something frustrating — your rent seems to keep going up. According to <keyword id="20974307" type="General" weightage="20" keywordseo="ANAROCK-Research" source="keywords" meta.keywordsubtype="org" meta.entityname="ANAROCK Research" meta.hostid="261" meta.entityid="ANAROCK Research">ANAROCK Research</keyword>, in several of India’s top cities, rental prices have jumped significantly, even more than <keyword id="21006188" type="General" weightage="20" keywordseo="property-values" source="keywords">property values</keyword> in some places. For example, in Bengaluru’s Sarjapur Road, average monthly rents shot up by 67% between the end of 2021 and the middle of 2024. If you were paying Rs 21,000 in rent at the end of 2021, that would now be around Rs 35,000 a month! And Bengaluru isn’t the only city where renters are feeling the squeeze. In Pune’s Hinjewadi, rent prices have surged by 52%, while property values went up by just 31%. Similarly, in Kolkata’s EM Bypass, rents rose by 46%, but property prices saw a much smaller bump of 15%. But there are cities where buying makes even more sense because property prices are outpacing rental costs. In Hyderabad’s Gachibowli, for instance, while rent went up by 50%, property values soared by 70%. This trend is also seen in NCR’s Sohna Road, where rents increased by 40%, but property prices grew by 54%. <h2>Is renting really worth it?</h2>Let’s say you’re living in a 2BHK flat in Bengaluru, paying Rs 50,000 a month in rent. It might seem like an okay deal at first, but when you look at the long-term cost, things get tricky. Dr Prashant Thakur, Regional Director &amp; Head of Research at ANAROCK, breaks it down: "One-year payable rent for the individual is Rs 50,000 x 12 = Rs 6,00,000. For the next 10 years, the total rental outgo, including an annual rental increase of 7%, will be around Rs 83 lakh. This rental outgo is almost 69% of the total cost of this property — and this is just an expense with no investment value accrued." <div type="Article" hostid="261" msid="113367496" title="I bought my dream home, but the difficult process and higher cost sometimes make me wish I&amp;#39;d stuck with renting" mstype="2" mssubtype="0"></div>What does that mean? If you keep renting, you’re essentially throwing money out the window without gaining any ownership of the home. While you may have the flexibility that comes with renting, your hard-earned money doesn’t build any long-term value. <h2>Is it time to make the home purchase leap?</h2>So, what if you took the plunge and bought the place instead? Let’s say you’re eyeing a Rs 1.2 crore apartment and can afford to put down a 20% down payment, with the rest coming from a 10-year home loan at 9.5% interest. Dr. Thakur explains, “If the individual opts to buy the property via a home loan, has the financial wherewithal to make a 20% down payment, and borrows the remaining amount over a 10-year tenure at 9.5% interest rate, such a purchase is definitely profitable. Instead of spending a huge amount on rent, the individual can pay monthly EMIs and ultimately own the physical asset after a ten-year period.” With this approach, the monthly EMIs may be slightly higher than what you’re paying in rent, but there’s a key difference — you’re working towards owning your home. After 10 years, the home is yours, and you don’t have to worry about rent going up year after year. <h2>Homeownership isn’t just about the numbers</h2>While the math might lean towards buying, it’s not just about finances. For some people, renting makes more sense, especially if they don’t plan to settle down in one place for a long time. Job mobility, financial stability, and lifestyle choices all factor into this decision. However, something interesting happened during the COVID-19 pandemic. Many people, including millennials who had previously been all about renting, started reconsidering. The pandemic brought a sense of uncertainty, and suddenly, the security of owning a home became much more attractive. Dr. Thakur points out, "Amid a rising aversion to high-risk investments, an increasing number of tenants see rent as an expense, and EMIs as SIPs towards a non-volatile asset." <div type="Article" hostid="261" msid="113395713" title="Welcome to interest-rate cut week: Here&amp;#39;s how the Fed&amp;#39;s next move will impact everything from home prices to new cars loans" mstype="2" mssubtype="0"></div>Plus, home loan interest rates are currently lower, averaging between 8.75% and 9.5%, making homeownership more affordable than it has been in the past few years. And let’s not forget the tax benefits: Homebuyers can avail of deduction on principal repayment, interest charges, and a further deduction of Rs 50,000 for first-home buyers. The answer, as with most things, isn’t black and white. Renting offers flexibility, especially if your job might take you to a new city in a year or two. But with rents rising sharply in cities like Bengaluru, Pune, and Chennai, buying might be a smarter option in the long run. If you’re financially ready to make a down payment and secure a home loan, investing in a home could save you from steep rental hikes and give you the stability of owning a property.

Should you rent or buy a home? Here’s how much rental pricing has gone up compared to ownership cost in major Indian cities

In March 2023, Citigroup CEO Jane Fraser anointed Anand Selva, as the bank's chief operating officer. His mandate: oversee a deeply unsexy yet crucial initiative to regain compliance with regulators. At the time, she praised his "long track record of delivering results."So far, Selva's tenure has been rocky.In July, two regulators <a target="_blank" href="https://www.businessinsider.com/citi-jane-fraser-regulatory-citigroup-transformation-2024-7">fined Citi $135.6 million</a> for failing to make enough progress in fixing its data-management issues. The bank had agreed in 2020 to work on this problem and others, including poor risk controls, after <a target="_blank" href="https://markets.businessinsider.com/news/stocks/citigroup-slammed-400-mln-fine-longstanding-deficiencies-regulation-occ-fed-2020-10-1029660295">paying $400 million</a> in fines to the Federal Reserve and the Office of the Comptroller of the Currency. The OCC said in July that the bank had made "meaningful progress overall" but that the agency wanted to ensure Citi allocated enough resources to address the "persistent weaknesses" regarding data.These new fines are despite Citi dedicating massive resources to a firmwide initiative to overhaul the bank's technology. This program, called the <a target="_blank" href="https://www.businessinsider.com/citi-transformation-citigroup-regulatory-fine-anand-selvakesari-2024-7">"Transformation"</a> and overseen by Selva, has about 13,000 employees. Citi spent $7.4 billion on the endeavor from 2021 through 2023. This year's budget has been increased by $250 million, to more than $3 billion.The pressure is on, with Sen. Elizabeth Warren urging the OCC to "impose growth restrictions" on Citi, arguing that it has grown "too big to manage." The regulator and Citi declined to comment."We've always said that progress wouldn't be linear," Fraser said after the latest fines, "and we have no doubt that we will be successful in getting our firm where it needs to be in terms of our Transformation."For Selva, leading the Transformation is unlike any test he has faced in his three-decade career at Citi. Selva, who goes by the shortened version of his last name, Selvakesari, joined Citi as an assistant operations manager in Chennai, India, in 1991. He rose through the ranks in Asia before taking over the US consumer bank in 2019. When Fraser was made CEO in 2021, she chose Selva, who's now 57, to replace her as the global head of consumer banking.In his current role, his mandate is to make the bank safer, not to turn a profit. To do so, he has to solve for Citi's <a target="_blank" href="https://www.businessinsider.com/inside-real-reasons-behind-citi-mike-corbat-early-retirement-2020-9">decades of underinvestment</a> in its infrastructure, which affects every business line of the bank.Business Insider talked to 14 current and former Citi employees who have worked under Selva to get a picture of the challenge facing him and why he was put in charge of the bank's No. 1 priority. All but two spoke on the condition of anonymity, citing fear of reprisal or the sensitivity of regulatory matters. Three senior executives pointed to his experience navigating regulation and working with technology from running Citi's consumer bank. Gonzalo Luchetti, Selva's successor as the head of the US consumer business, told BI that serving 70 million customers required handling tremendous operational risk."If we mess it up, usually you don't mess it up for one; you mess it up for hundreds of thousands, if not millions," he said. "You have to be super good at process orientation and making sure that there's high discipline and rigor."Luchetti also emphasized Selva's longevity at Citi and experience across regions."He knows the fabric of the firm very well," Luchetti said. "The Transformation is about really repiping the machine. He's touched a lot of the machine himself."But touching the machine isn't the same as fixing it. Eight employees told BI that they were surprised that Selva was made the head of the Transformation given that he had never held a leadership role in technology or compliance. They described Citi's culture as a cliquey environment that rewards managing up over results, noting that the COO promotion followed dismal performance for the wealth unit he oversaw."The biggest job was given to a guy who with 1 ½ years in wealth wasn't able to do anything," a former managing director said.Selva has also come under scrutiny for a lawsuit filed against him and the bank by an ex-Transformation executive in May. Kathleen Martin, a former interim data chair, alleged that Selva pressured her to hide information from the OCC that would make Citi "look bad" and that she was fired in September 2023 after multiple refusals. Citi denied the accusations and filed a counterclaim in late August, alleging that Martin was fired for underperformance. Citi has recently made leadership changes to Selva's unit. The bank tapped its new tech head, <a target="_blank" href="https://www.businessinsider.com/citi-data-tim-ryan-anand-selva-memo-transformation-regulators-2024-9">Tim Ryan</a>, to lead the data effort alongside Selva and take over management of the 800-employee data team. The work on data, along with risks and controls, is paramount to the Transformation.Splitting the burden may expedite the massive task, which requires coordinating work from employees across the entire bank. Citi declined to specify a timeline, citing the confidential nature of regulatory matters. A managing director in the Transformation estimated that the work required would take about two decades.Mike Mayo, a Wells Fargo analyst, said that until Citi meets the requirements of the OCC and the Federal Reserve, the bank is in "regulatory purgatory.""Citi has thrown over 10,000 people and $3 billion and more at this problem," Mayo told BI in July. "They just have to get it done."Selva does have a long track record at Citi. Born in Madurai, a large city in southern India, he studied engineering and played basketball at the Coimbatore Institute of Technology. He earned his master's in business administration at Madurai Kamaraj University before joining Citi in 1991.Selva made his name at Citi by shaping its consumer-bank businesses across Asia. He led retail banking in China and India before taking over the Asia Pacific market in 2015. His approach was digital-first, eschewing branches for banking apps. Despite closing 60% of bank branches in Asia from 2016 through 2018, Selva grew deposits by 10%.<div type="image" title="Citi's Anand Selva speaking at a panel, seated and wearing a pinstripe suit and a red tie." height="3307" width="4960" msid="114093573" hostid="261" sizebytes="2310830"></div>"He's very tech and digital-oriented," Luchetti said. "We've been to China together to look at startups and firms that were disrupting the world. He was always very connected with learning more about technology, had that curiosity, and then the execution chops to get it done here."In 2019, Selva moved from Singapore to New York, where he now lives with his family, to run the US consumer bank. He assumed the global consumer-banking business from Fraser in 2021. Selva leaned on credit-card and lending offerings, launching products like Citi Custom Cash which allowed customers to pick their reward categories, and Flex Pay, a buy-now, pay-later service. Under Selva, Citi was the No. 2 issuer of credit cards in the US, and deposits grew by more than a third, to about $220 billion.In 2021, Citi started divesting itself of more than a dozen consumer-bank markets across Asia, Europe, and the Middle East. Selva was an important player on both sides of the table, according to Adora Tidalgo, the head of operational risk management at Citi. She said he helped find Asian acquirers that maximized value for Citi while keeping the businesses running smoothly with low attrition."That skill of balancing how much you want to bring in terms of revenue and the credit loss you want to take is really a skill that very much needs to be honed in the consumer space," she said. "That balancing, to me, I have seen Anand over the year been very successful in doing that."There have been some bumps in the road. As part of Fraser's reorganization of the bank in 2021, Selva gained oversight of a newly formed wealth unit and its new leader, Jim O'Donnell. Six current and former managing directors told BI that Selva's approach focused more on scale and digital offerings than high-touch client service. For instance, he didn't approve loans that failed to meet a certain threshold of return, even if it meant losing an important client, two former managing directors said."The way that every private banker on earth thinks about relationships is you need to invest in relationships, and then as you start to do more business with clients, you start getting more and more valuable opportunities with them," one of the former managing directors said. "You have to look at the relationship. You can't just look at every single transaction."Employees argued that Selva's playbook may have worked to build scale in Asia but not to satisfy well-heeled — and much more sought-after — US clients."I think Anand's decisions were comparing everything to what he knew from his time in Asia, and they are completely different markets," another former managing director said. "In Asia, Citi has a very recognizable brand, and people actually want to bank with Citi. You don't have to sell it that hard."<div type="image" title="Citi CEO Jane Fraser testifying at Congress" height="3828" width="5846" msid="114093582" hostid="261" sizebytes="314760"></div>The wealth business' revenue dropped by 6% year over year at the end of 2022. Fraser called the division's performance "disappointing." O'Donnell's reign over wealth was cut short in January 2023, and it was later placed under <a target="_blank" href="https://www.businessinsider.com/andy-sieg-citi-wealth-management-ceo-2024-6">Andy Sieg</a>, the former head of Merrill Wealth Management. With Citi on a campaign to divest itself of 14 international consumer-bank markets, Selva's remit shrank.His appointment as COO thrust him into the spotlight. Tidalgo told BI that he was no stranger to the task of dealing with regulators."When you are the head of a country, you are the face of Citi to the regulators. Good, bad, or indifferent, you have to face them," she said. "That's part of the job."Citi's Transformation and its challenges predate Selva's appointment as COO. It existed as a firmwide initiative before the October 2020 fines but was kicked into overdrive after Citi entered consent orders with the OCC and the Federal Reserve.It can be viewed as two parts. The most visible is the strategy to simplify and modernize the bank, such as divesting Asian consumer businesses, removing five layers of management, and <a target="_blank" href="https://www.businessinsider.com/citigroup-reorganization-layoffs-management-overhaul-reorganization-jane-fraser-stock-price-2023-9">reorganizing</a> so that the five business lines report directly to Fraser.The second part is meant to address the 2020 consent orders. The initiative is separated into seven programs, including finance, compliance, and risk and controls. While some 13,000 employees are dedicated to the Transformation, much of this work is carried out by employees across the bank. Selva sits at the center, coordinating these efforts. He's in a tough position, as much of the Transformation's work is executed by employees in other divisions."The challenge with the Transformation role is you are accountable yet not responsible," the managing director in the Transformation said. "The role is really coordinating and getting others to do what they need to do, which is very different from running a business where the entire team follows your lead, you own it, you have the ability to actually get them to do this stuff."When everyone is accountable, effectively no one is, a former senior vice president in the Transformation said. Matters got stuck in bureaucracy, bouncing from one department to another and being debated in committee for months.A senior executive in the Transformation acknowledged that the programs often rely on each other's work. For example, a delay in data work can lead to one for a finance project."When we are asked sometimes why it is challenging to execute on the Transformation, one of the challenges is the interconnectivity of those seven works," she said.The senior executive said the Transformation's successes had been overlooked, partly because the bank is limited in what it can say on regulatory matters. For instance, Citi has retired or replaced a quarter of its applications, halfway to its overall goal. The bank declined to specify the number of existing or terminated applications, but as of July, it had retired nearly 300 applications this year. The senior executive also touted the bank's streamlining its risk-management workflow.But the Transformation has earned a middling grade from Citi itself. The bank evaluates the initiative's success for the purposes of a bonus program applicable to about 200 senior employees, including Selva. In 2022, an internal committee gave it a score of 94%, citing targets it met, such as submitting remediation plans to regulators.For 2023, the score sank to 80%, calculated by measuring the timeliness of executing scheduled work, the percentage of work deemed complete by the bank's internal auditors, and a "qualitative consideration of Citi's cultural change" derived from the bank's employee surveys.<div type="image" title="Headshot of Citi's new tech head Tim Ryan, smiling and wearing a black suit jacket with a light blue shirt" height="739" width="985" msid="114093578" hostid="261" sizebytes="32120"></div>Bringing in Ryan, the bank's head of technology and business enablement, to help the bank catch up makes sense. The recruiter Phil Waxelbaum argued that a more traditional candidate to help lead the Transformation would be a seasoned, high-ranking person from a regulatory agency. But someone with a nonbanking background such as consulting or technology can work, too, according to recruiter Jeffrey Warren. Ryan joined Citi in June after seven years leading the US business of PricewaterhouseCoopers."In situations like this when you are looking to drive transformation, you need someone who can work at the intersection of people, processes, and technology," said Warren, managing director at Russell Reynolds Associates. "That includes working from within and likely driving some change with new people who have experience in new technologies or new ways of doing things."Ryan is now sharing data, a significant component of the Transformation, with Selva. Another PwC alum, Citi's head of enterprise risk management, Ashutosh Nawani, will take over the chief data office from one of Selva's lieutenants, Japan Mehta, and report to Ryan. Mehta will move to another role that the bank declined to specify.Employees told BI that they thought bringing in Ryan and Nawani would help."Sure, there might be some reservation that more consultants are coming in to run Citi, but there is a positive vibe of changing senior leadership," the former senior vice president in the Transformation said. "Legacy Citi culture is what got us into this spot in the first place."While the July fines did not meaningfully move Citi's stock, they have placed the bank and the Transformation under greater scrutiny. The OCC has ordered Citi to provide a resource-review plan each quarter to ensure the bank is providing enough resources for the effort. The Securities and Exchange Commission has also required the bank to address the Transformation's progress in future filings.The outstanding issues have also impeded Citi from expanding in China. According to <a target="_blank" href="https://www.bloomberg.com/news/articles/2024-09-23/citigroup-s-china-expansion-plan-put-on-hold-by-us-regulators">Bloomberg</a>, the bank is still waiting on a clearance letter from the Federal Reserve to set up a securities office. The bank declined to comment on the process but said it was "fully committed to supporting clients" in China.<div type="image" title="Democratic Sen. Elizabeth Warren of Massachusetts at a hearing on Capitol Hill on January 11, 2024." height="1333" width="2000" msid="114093583" hostid="261" sizebytes="96482"></div>Regulators placing an asset cap on Citi, as Senator Warren has requested, isn't out of the realm of possibility, said Timothy Coffey, an analyst with Janney Montgomery Scott."At what point do the regulators just get fed up with Citi's inability to adequately resolve these issues or stick to the timeline that they've laid out?" he said. "That's an open-ended question."But the consent orders and the lack of progress are distractions in themselves. When Fraser took over Citi nearly four years ago, she said the Transformation was her No. 1 priority and asked for patience. Now her requests for time are wearing thin. Regardless of who leads the Transformation, Fraser is still accountable."This stays out here in terms of headline risk, and I think it puts a cap on the valuation that Citi can achieve," said Stephen Biggar, an Argus Research analyst. "It's an overhang on the stock. It's an overhang on the reputation of Fraser."Do you work for Citi? Have a tip or story to share? Reach out to Hayley Cuccinello at <a target="_blank" href="mailto:hcuccinello@businessinsider.com">hcuccinello@businessinsider.com</a> or 917 740 5340, which works for calls, text, and the encrypted messaging app Signal.

Meet the executive tasked with Citi's hardest challenge: getting the bank's house in order

The <keyword id="20449324" type="General" weightage="20" keywordseo="Finance-Bill" source="keywords">Finance Bill</keyword> 2024 was passed by <keyword id="19895394" type="General" weightage="20" keywordseo="Lok-Sabha" source="keywords" meta.keywordsubtype="org" meta.entityname="Lok Sabha" meta.hostid="261" meta.entityid="Lok Sabha">Lok Sabha</keyword> on Wednesday evening, with a few amendments moved by the government. Replying to the debate, Finance Minister Nirmala Sitharman said the approach of the government has been to bring greater simplification of <keyword id="19987671" type="General" weightage="20" keywordseo="tax" source="keywords">tax</keyword> laws and procedures and enable growth and employment in the country. She responded to points made by members. The Finance Minister clarified that in real estate, the roll over provisions have not been withdrawn and are applicable. She said if the capital gain in a property transaction is invested in buying another one or two properties up to a maximum value of Rs 10 crore, no capital gain tax is required to be paid on such profits. <keyword id="20619608" type="General" weightage="20" keywordseo="capital-gains" source="keywords">Capital gains</keyword> can also still be invested in bonds which are notified under Section 54 of the Income Tax Act up to a maximum of Rs 50 lakh annually and save on taxes. To give relief on budget proposals, Sitharaman also moved an amendment in the Finance Bill on the changes in the capital gains tax on <keyword id="20412285" type="General" weightage="20" keywordseo="property-transactions" source="keywords">property transactions</keyword>. The amendment implies that taxpayers can avail either a lower tax of 12.5% without indexation or a rate of 20% with indexation, if the property is acquired prior to July 23, 2024, the day union budget was presented in the Lok Sabha. Sitharaman clarified that taxpayers can compute taxes under both provisions and choose to pay tax under the scheme where lower tax is applied. Effectively, July 23, 2024, is now set as the cut-off date for the calculation of the capital gains versus the earlier cut-off of 2001. Sitharaman said she has proposed these amendments as some members have raised hypothetical calculation to prove that under new provisions taxpayers will have to pay higher taxes. The new tax proposals on capital gains tax was brought in to bring in parity among different asset classes like equities, mutual funds and real estate. In the Finance Bill introduced on July 23, the Finance Minister had proposed a flat long term capital gains tax of 12.5% with no <keyword id="943856" type="General" weightage="100" keywordseo="indexation-benefit" source="Orion">indexation benefit</keyword>s, prior to it property transactions used to be taxed at 20% with indexation benefit. The minister also clarified that the grandfathering proposal will be allowed only for individual and Hindu Undivided Family (HUF) taxpayers and not for companies and Non Resident Individuals. They have to pay flat 12.5% LTCG tax without indexation. The proposed amendment will apply not only on real estate transactions, but also on unlisted equity transactions, which are done before July 23, 2024. All such transactions will be taxed at 10% long term capital gains instead of FY24-25 budget provision of 12.5% tax. With the opposition members demanding removal of <keyword id="19951327" type="General" weightage="20" keywordseo="GST" source="keywords">GST</keyword> on health insurance, Sitharaman said tax was there on medical insurance even before GST was introduced. "There was already a Service Tax on medical insurance, before the GST was introduced. This is not a new tax, it was already there in all the states. Those protesting here, did they discuss regarding the removal of this tax in their states? Did they write to the Finance Ministers of their respective states about it and asked them to raise it in the GST Council where states have 2/3rd part? No, but they are protesting here. This is their double standards, this is their drama," she said. "Wrongful protests have happened recently, and comments have been passed on the basis of a news report which suggested that the 'Centre has pocketed Rs. 24,529 crores of health insurance premiums alone'. This is incorrect and highly misleading. The GST rate of 18% on health insurance comprises of 9% CGST and 9% SGST. Thus, of the total collections of Rs 24,529 crores from health insurance in the last 3 years, Half of it, Rs. 12,264 crores, went straight to the states as SGST. It doesn't even come to the Centre," she added. The minister said that apart from this, roughly 41%of the Centre's share of GST collection on health insurance is devolved back to the states again, as part of Tax Devolution as per the Finance Commission's formula. Sitharaman said the new income tax regime is simpler and offers lower income tax rates for individuals. "It gives flexibility to the taxpayer to see where he wants to put his money in the absence of exemptions which is available in the old income tax regime. The old regime has not been dissolved and is still an alternative to the new tax regime. It still offers benefits of various deductions such as interest on home loan, etc. Individuals without business income can choose between regimes once and can revert back too. Hence, a choice has been provided to assesse," she said. For the previous Assessment Year 2023-24 till December 31, 2023, about 3.8% of taxpayers opted for the new tax regime, which equates to 30.93 lakh individuals, from a total of 7.98 crore ITRs filed in the categories of ITR-1 to ITR-4, she said. "However, for the Assessment Year 2024-25 until July 31, 2024, there was a dramatic increase in adoption of the new regime, with approximately 72.8% of taxpayers choosing the new tax regime. This represents about 5.25 crore individuals, out of a total of 7.22 crore ITRs filed in the same category." Sitharaman said this shows a substantial shift in taxpayer preference towards the new tax regime, over the span of just one year. "Taxpayers opting for the new regime does not mean savings and investments are not happening in the economy by the middle-class. Due to growth in fintech, better awareness, and ease of investment due to UPI, e-KYC, progressive regulations, investments in mutual funds have increased tremendously. On an average, 17.88 lakh new folios have been added every month in the last 5 years since June 2019. The number of unique mutual fund investors has grown from under 1 crore in 2014 to about 4 crore today," she added. The Finance (No.2) Bill, 2024 was passed after amendments moved by opposition were negatived. Sitharaman said the vision of Prime Minister Narendra Modi has been to establish a simple, efficient and fair technology-driven taxation regime in the country. "So, simplification and ease of compliance for the taxpayer has been the primary objective. In the last 10 years, and this year, in the third term of PM Modi, the approach to taxation has been to simplify it, reduce the burden on taxpayer and make sure it is transparent and equitable," she said. "This year also, our approach has been that we bring in greater simplification of tax laws and procedures, and that we enable growth and employment in this country," she added. Sitharaman presented the Union Budget in Parliament on July 23. This is the first full budget of the NDA government led by PM Modi. The BJP-led alliance won a third successive term earlier this year. The Lok Sabha took up discussion on the Finance Bill after the Appropriation Bill for the central government's expenditure for 2024-25 was passed by the House on Monday. The Finance Bill will now be discussed by Rajya Sabha. The passage of bill will complete the budget process.

Lok Sabha passes Finance Bill, provision on LTCG tax on property transactions amended

In a surprising turn of events, <keyword id="20137391" type="General" weightage="100" keywordseo="Nikhil-Kamath" source="keywords">Nikhil Kamath</keyword>, co-founder of India's biggest discount brokerage firm <keyword id="19913826" type="General" weightage="20" keywordseo="Zerodha" source="keywords" meta.keywordsubtype="org" meta.entityname="Zerodha" meta.hostid="261" meta.entityid="Zerodha">Zerodha</keyword>, left the internet divided by purchasing a house, despite recently having advocated voraciously for renting property in his popular podcast "WTF." Comedian Sonali Thakkar Desai took to X (formerly Twitter) to highlight this U-turn, noting that "Nikhil Kamath has bought a house after advocating for so long about how “renting is the best; only fools would buy property." So let this be a lesson to literally everyone who listened to him or any other finance bro and based their real estate decisions on rubbish reels." She further added that "Mutual funds and Nikhil Kamath's opinions are subject to market risk". Kamath, who has a net worth of $3.1 billion, acknowledged that a lack of control over one's living situation is one of the biggest drawbacks of renting, noting a personal incident where he had to unwillingly and unexpectedly move out of a house. However, he maintained his skeptical attitude toward real estate as an investment, calling it illiquid and arbitrarily priced in the high-end housing market. Kamath also highlighted that due to the sky-scraping costs associated with buying property, like stamp duties of 5-6% on property transactions, it is not economically feasible to frequently buy and sell real estate, as opposed to other asset classes like gold, stocks, and more. On his podcast, Kamath also highlighted that renting does not always translate into a profitable business. "I think nobody makes money from buying and renting a place. You do not have occupancy throughout the year for something like AirBnB. Accounting for inflation and interest rates, the return on this investment is negligible," he said. Kamath's decision has reignited the never-ending debate between renting and buying property. While some social media users pointed out that for the wealthy, the choice between renting and buying is largely inconsequential, others emphasized the immense emotional and stability benefits that came along with homeownership. Kartik Rangappa, who heads Zerodha's Varsity, recently tweeted that it is okay to keep the math and Excel sheets behind buying a house aside if it gives you a sense of security and peace of mind. "Owning a house versus renting is an endless debate often backed by elaborate excel sheet math. Keep the math aside and buy a home if it make you feel secure and gives you peace of mind. Peace of mind &gt;&gt; Excel sheet math," he tweeted on October 16, 2024. There is no denying the fact that owning a house is an expensive affair and a long-term financial commitment as well. Recent report from FICCI and ANAROCK suggest that the average budget range for a 2BHK in Gurgaon is anywhere between Rs 90 lakh and Rs 1.3 crore. Getting a 2BHK in Noida, another prominent satellite town of Delhi, can cost up to Rs 85 lakh to Rs 1.20 crore. As it is, with the central bank not looking to cut rates anytime soon, home loan interest rates are set to remain elevated, meaning higher EMI outflows from your pockets if you are looking to buy a home in the present environment.

Billionaire broker Nikhil Kamath buys home, leaves internet debating on renting vs. owning a house

<ul><li><keyword id="401567" type="General" weightage="100" keywordseo="faering-capital" source="Orion">Faering Capital</keyword> looks to participate in the mortgage lender’s journey ahead.</li><li>Vastu Housing is focused on the affordable housing market in India and has also started an NBFC to service new to credit customers.</li><li>Secondary transaction carried out by Multiples Alternate Asset Management. </li></ul> <keyword id="6236441" type="General" weightage="80" keywordseo="vastu-housing-finance" source="Orion">Vastu Housing Finance</keyword> has closed a fund raise from Faering Capital, founded by <keyword id="401568" type="General" weightage="80" keywordseo="aditya-parekh" source="Orion">Aditya Parekh</keyword> and Sameer Shroff. The transaction is a secondary sale by funds managed by Multiples Alternate Asset Management and other shareholders of the company. The value of the transaction is $30 mn. Aditya Parekh, Co-founder &amp; Managing Director of Faering Capital said, “We are excited to partner with Sandeep and team and other shareholders in the Vastu journey. Housing finance and specifically affordable housing are multidecadal opportunities in India. Having tracked Vastu’s progress over the last few years, we are confident that the company is well on its way to build a highly profitable, large and respected institutional franchise focused on affordable housing finance.” Private equity investors are keenly looking at India’s fintechs and non-banks that look to build businesses that serve the underserved population in India. According to deal data analysed by <keyword id="131240" type="General" weightage="50" keywordseo="grant-thornton" source="Orion">Grant Thornton</keyword>, a total of 30 private equity deals were executed in the sector, cumulatively valued at $566 million in the September quarter of 2023. Among these transactions, fintech claimed the spotlight with a 30% share in terms of deal volumes, even though sequentially value and volume showed a dip. However, banks and non-banks ruled the charts with respect to values, contributing a 77% share in overall investments. Vastu is a digitally enabled retail affordable housing finance company with a pan-India presence. Vastu currently has an AUM of $900 million and serves 15 states across India in 200+ markets. It aims to become a mortgage-led consumer lender serving the credit needs of emerging and aspiring India, Vastu has also set up a non-banking finance company (NBFC), Vastu Finserve in 2019, venturing into vehicle and MSME finance. Creating social impact lies at the core of Vastu, which focuses on lending to the low-middle income, mainly self-employed segment, and backing women borrowers. Vastu has more than 40 lending relationships across leading public and private sector banks and leading financial institutions. Sandeep Menon, Founder, MD &amp; CEO, Vastu said,"We are happy to have Faering Capital join us as a valued partner. Aditya, Sameer and team have great domain knowledge in our industry and have been long-term supporters of Vastu. We look forward to having them as long-term shareholders.”

Aditya Parekh’s Faering Capital picks up stake in Vastu Housing Finance

<ul class="summary-list"><li>"Sweaty startup" describes business ownership in traditionally blue-collar industries.</li><li>Sweaty startups are facing challenges from inflation and increased competition.</li></ul>Patrick Hocker, 35, never envisioned owning a <a target="_blank" class="" href="https://www.businessinsider.com/carbon-monoxide-nyc-rat-exterminator-clap-cheer-free-beer-2023-10">pest-control</a> company. He waited tables at 18, married young, had kids, and became a security guard.After meeting someone who worked in pest control, he got into the industry himself and, after a layoff, decided to start his own business in 2020. He knew his market in northern <a target="_blank" class="" href="https://www.businessinsider.com/moving-from-florida-to-virginia-pros-cons-cape-coral-weather-2024-2">Virginia</a> could be profitable because of its higher household incomes."I always said I wanted to own my own business one day, but I didn't want it to be in pest control," Hocker said. "Pest control is not sexy. It's dirty. It's hard, physical work."He said that he spent $5,000 on startup costs including new equipment for his company, Bluebird Pest Solutions, and that he relied mostly on word of mouth and Google reviews to build the brand.However, his four-person company isn't growing as fast as he hoped. He said he thought <a target="_blank" class="" href="https://www.businessinsider.com/why-costs-keep-rising-inflation-goes-down-eggs-tickets-insurance-2024-7">inflation</a> had made customers more budget-conscious.<div type="image" title="Patrick Hocker" height="819" width="1285" msid="112244113" hostid="261" sizebytes="51046"></div>"We've found that people are taking a lot more time this year to make a decision about who to hire, or if they're going to hire someone for pest control, there seems to be more of an emphasis on price over necessarily buying value in that service," Hocker said.Rising prices for vehicle-maintenance supplies and labor costs have eaten into his profits. He said he'd been "playing financial catch-up," as he's relied on this business as his family's sole source of income and cashed out his retirement fund to finance it.Hocker is running a "<a target="_blank" class="" href="https://www.businessinsider.com/sweaty-startups-millennial-business-owners-entrepreneurship-2021-5">sweaty startup</a>," a term coined by the entrepreneur Nick Huber, who owns nine such companies and has amassed communities on X and Reddit. Sweaty startups are <a target="_blank" class="" href="https://www.businessinsider.com/blue-collar-job-demand-growth-white-collar-layoffs-ai-2024-5">blue-collar businesses</a>, often in unglamorous or laborious fields like septic services, car washes, or lawn care. It's what your grandparents would've just called a small business, but it was a tongue-in-cheek answer to the Silicon Valley-style entrepreneurship being glorified in culture at that time. The community boasts success stories of profitable <a target="_blank" class="" href="https://www.businessinsider.com/22-year-old-bought-car-wash-passive-income-2023-1">car wash owners</a> and successful <a target="_blank" class="" href="https://www.forbes.com/advisor/business/start-a-vending-machine-business/">vending machine</a> owners."If you look at who is truly wealthy in these small towns, people who are eating at the nice restaurants and at the nice country clubs, you'll find that they didn't have new ideas at all," Huber told BI. "They didn't have tech startups aimed at changing the world, and they didn't build a billion-dollar business. Most of them did something common or boring, and they just did it uncommonly well."While some sweaty startup owners told Business Insider they loved the work and felt fulfilled, many said it was becoming harder to scale up. Though <a target="_blank" href="https://www.bls.gov/news.release/cesan.nr0.htm">consumer spending</a> has been on the rise since 2020, with a marked shift <a target="_blank" class="" href="https://www.businessinsider.com/hate-spending-consumers-economic-sentiment-retail-sales-inflation-gdp-growth-2024-4">from goods to services,</a> business owners generally blamed customers' tightening budgets. The reasons likely also include high interest rates and increased competition.<h2 id="f0d4786b-e1d6-4b04-aa79-57bb464d6dd3">Growth is challenging, but sweaty startups still provide plenty of opportunities</h2>Huber said he saw sweaty startups become more popular in the first two years of the pandemic following mass layoffs and a rethinking of work. While some entrepreneurs go into these businesses hoping to strike it rich — some have even <a target="_blank" href="https://www.reddit.com/r/sweatystartup/comments/15mcknl/how_to_handle_the_stigma_of_leaving_a_white/">left Wall Street jobs</a> to do so — many do so because they want more flexibility and time with family, financial risks be damned.Huber said that in some ways the <a target="_blank" class="" href="https://www.businessinsider.com/millionaire-small-business-entrepreneur-revenue-census-construction-finance-real-estate-2024-6">business landscape</a> is getting harder for founders to break into. <a target="_blank" class="" href="https://www.businessinsider.com/federal-reserve-interest-rates-jerome-powell-borrowing-costs-stock-market-2024-5">High interest rates</a> have hurt owners borrowing cash to open their businesses. While the number of sweaty startup founders seeking venture capital is likely low, Huber said he's known it to happen."A lot of venture-backed businesses are in a lot of trouble and hurting right now," Huber said. "They raised a lot of money in 2021 and 2022, and now they're seeing the economic headwinds from inflation and are unable to raise their next round. They're kind of stuck."Sources said <a target="_blank" class="" href="https://www.businessinsider.com/private-equity-firms-start-recruiting-early-investment-bank-apollo-kkr-2024-6">private equity</a> firms have been eyeing smaller businesses in these industries, which could tighten competition. For instance, private equity firm <a target="_blank" class="" href="https://www.businessinsider.com/executive-coaching-benefits-according-to-graham-weaver-ceo-alpine-investors-2024-7">Alpine Investors</a> has partnered with <a target="_blank" href="https://alpineinvestors.com/portfolio/">hundreds of businesses</a> across industries such as HVAC, plumbing and electrical, roofing repair, and tree care.The American Investment Council, a lobbying and research organization for the private-equity industry, estimates that private equity owns only about 2.5% of all middle-market businesses, or those earning about $10 million to $1 billion, in the US. Still, some small businesses look to private equity to scale their businesses in different markets, even if that means overhauling operations in some cases."Small businesses partner with private-equity firms because they provide access to capital and organizational support to help companies grow," Drew Maloney, the council's president and CEO, told BI.Some business owners who left the corporate world to run a sweaty startup said it came with plenty of benefits but lots of stress about staying afloat.Stan Chen, 36, worked at <a target="_blank" class="" href="https://www.businessinsider.com/blackrock-news-updates">BlackRock</a>, then in mortgage sales, and then at a global payments company before getting into a sweaty startup. His family operated restaurants in Boston for decades, and after years in the corporate world, he wanted to transition to a service-type business.He said he "didn't want to have a boss, climb the corporate ladder, and deal with office politics." Referring to his family, he added, "If immigrants who barely speak English that came here with $20 can run a business of three to four restaurants and basically become millionaires and have a nice middle-class lifestyle, I'm pretty sure I can do it too."<div type="image" title="Stan Chen" height="1500" width="2000" msid="112244122" hostid="261" sizebytes="68286"></div>He saw that BerryClean, a house-cleaning service in San Francisco, was for sale. After meeting with the management and employees — who he said reminded him of his family — he acquired the company in July 2019.He said that when the pandemic hit he lost 90% of his business, but he applied for loans and improvised. The company built its own "mini Uber service," Chen said, offering rides in its 20 cars and minivans. When demand for cleaning picked up again, he sometimes worked 18-hour days to keep operations running. The company's washers and vacuums would regularly break down, and he would sometimes have to do laundry at his home to keep clients satisfied.Operations have grown recently, and he said he's seen staff get their lives better on track and "achieve the American dream." Despite the company's growth over the past few years, though, Chen said business had gotten tougher recently with growing competition in San Francisco. He said he had to raise prices to keep up with inflation. He noticed that people wanted to spend less on <a target="_blank" class="" href="https://www.businessinsider.com/how-to-start-cleaning-business-side-hustle-low-startup-costs-2023-2">cleaning services</a> in his area, and the company dug into profits to increase its advertising."A lot of people get into this kind of business for the wrong reasons, because they listen to a podcast or they're on social media, thinking it's easy money," Chen said. "It's not easy money — it's the hardest money there is. You have to earn your keep every day, and you have to get your hands dirty. If you don't do a good job, you're fired."Alejandro Florez, 27, the president of The Cleaning Pros of America in Bradenton, Florida, said the growing investments in janitorial companies in his area were in some ways antithetical to the idea of sweaty startups."A lot of small cleaning businesses are pulled up by the bootstraps, and we usually start them out of necessity as our only avenue of making money," Florez said.<div type="image" title="Alejandro Florez" height="817" width="1089" msid="112244119" hostid="261" sizebytes="35352"></div>Both of his parents were <a target="_blank" class="" href="https://www.businessinsider.com/frank-baez-earns-nyu-nursing-degree-used-to-be-janitor-2019-5">janitors</a>, and when he was a senior in high school he started a small cleaning company that he grew by knocking on doors and cold-calling. He relied on trial and error and supplier advice for pricing, production rates, and cleaning strategies for different facilities.He said this year he's had nearly $2 million in revenue with two dozen employees and over 30 clients. He hopes to grow over the next decade by expanding to Jacksonville or Orlando. Still, he said that because the pandemic helped the cleaning industry "massively," markets became much more saturated. He estimated that 45% to 55% of his overhead went to paying his employees."For our market, even though it's very profitable and attractive, there's a low barrier to entry," Florez said. "There's more people at the table wanting to eat from that table."Florez said the growth of private-equity investment in his area had made competition even more difficult. Since 2021, he said, he's been approached by a dozen private-equity firms wanting to invest in his company, but he's turned them down."When you get private equity into the mix, they're bringing a different dimension of business and being able to scale it differently," Florez said. "There are firms that can operate on 10% net profit, which I can't do. There are firms out there that are being a lot more aggressive."<h2 id="b453f9d2-5f80-484d-b4ca-0b542234b938">Trial and error to figure out what works</h2>For some sweaty-startup owners, staying ahead of the competition requires bouncing from company to company based on changing needs.Chris Salisbury, 35, has been an <a target="_blank" class="" href="https://www.businessinsider.com/best-side-hustles-for-introverts-2023-11">entrepreneur</a> since he was 16. He started a small house-painting business while in high school and a few other companies in his 20s.<div type="image" title="Chris Salisbury" height="600" width="800" msid="112244117" hostid="261" sizebytes="8160"></div>In 2016, he sold everything he owned; moved to Brooklyn, New York; and decided to start a new business while living in a wood shop. With two friends, he launched Spayce, a commercial cleaning and handyman company that worked with high-profile clients like BuzzFeed — Salisbury said the business brought in $120,000 in its first week and over $4 million in its first year.During the pandemic, Spayce manufactured Covid barriers and secured new contracts with clients. Salisbury also launched the brand We Paint Kitchen Cabinets, which he sold a year later."I pivoted 100 times since COVID happened, but it did initiate the need to automate and start combining all of the things that I learned how to do by hand and being around these tech companies," Salisbury said.Salisbury and his business partner then launched nuDoors in July 2023, specializing in cabinet-door replacements made mostly of recycled material. Though he didn't have much experience in the cabinet industry, Salisbury pulled from his past companies and asked successful people in the industry for help.Salisbury said he and his partner spent over $1 million on new equipment to better automate their manufacturing processes but didn't spend a penny on advertising. He added that the company had grown each month since it was launched and that he expects it to be profitable by next year."The smaller shops are going out of business, not having any workers because they're doing the old way of doing things, and no one's filling the void between the big guys that are too big to talk to you and the small guys going out of business because they can't compete," Salisbury said.Are you a sweaty startup owner or manager? Reach out to this reporter at <a target="_blank" href="mailto:nsheidlower@businessinsider.com">nsheidlower@businessinsider.com</a>.

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