The ₹60 lakh question: flat or fund?
India’s favourite investment argument, settled the only honest way: same money, same start date, same monthly income drawn from each, and fifteen years of actual data.
The study is deliberately fair. In October 2010, ₹60 lakh buys a flat that starts paying ₹15,000 a month in rent, rising 10% a year: a typical 3% yield with healthy escalation. The same ₹60 lakh goes into a balanced advantage fund, and a systematic withdrawal plan pays out exactly the same amounts on the same dates. Over fifteen years, both paths hand their owner ₹57.3 lakh of income.
Then the endings diverge. The flat, at 7.5% annual appreciation, is worth about ₹1.30 crore: a 7.9% XIRR including all that rent. The fund, despite selling units every month to pay the “rent”, compounds to about ₹2.40 crore: an 11.3% XIRR on actual NAV history. Same income, roughly ₹1.1 crore of extra wealth, and every rupee of it redeemable in days rather than months, in part rather than whole.
None of this argues against owning the home you live in: a roof is a life decision before it is a financial one. It argues against calling a second flat an “investment” without pricing the alternative: no registration costs, no tenants, no vacancy, no repairs, and a materially better outcome from the boring option.
Start with the study’s own numbers (₹60 lakh paying ₹15,000 a month, rising 10% yearly) then make it your corpus and your income.
Illustrative study, Oct 2010–2025: flat at 3% initial yield, 10% rent escalation, 7.5% appreciation; fund SWP on actual NAV history of a balanced advantage fund, identical withdrawal amounts. Past performance does not guarantee future returns. For education only, not advice. Prospar Consulting LLP.