I would like to take the authors attention to couple of things.
First of all the author assumes that a 25 lac worth property yields a monthly rent of Rs.13.5k. In my opinion its a too aggressive assumption given the current levels of Real estate prices.
Secondly, the author has completely ignored the concept of present value. Remember Re.1 received today is more valuable than Rs.2 received 20 years latter.
The perfect approach lies in valuing a real estate using prudent with the realisable rent as the returns from the property. If the real estate price is above the value of the property so determined then better rent a home and if the prices is less than the value then buy it.
