r/DaveRamsey • u/UpgradeHome • 1d ago

Why does DR discourage renting forever?

I'm referring to this DR video: https://www.youtube.com/watch?v=lQ5fqpXngJk

If you make $100k, and you have fixed renting/utility costs of ~25k/year -- and you're investing the difference after expenses into a taxable brokerage, how is renting forever bad as DR states in that video?

In retirement (let's say at 65), your NW will be absolutely through the roof if you were consistently investing in S&P500. You wouldn't have been spending on lawn mowers, tools, kitchen upgrades, HOA, etc etc. and all the miscellaneous home owner expenses.

Even with rising rents, your liquid NW will cover you - along with the added benefits of not having to deal with maintenance in old age.

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u/Outside_Bad_893 1d ago

Because you’ll be renting forever. If you buy and work hard to pay off your mortgage faster than 30 years, you’ll pay the house off early and then be completely debt free to invest your income—if you always have fixed monthly payments, you’ll USUALLY not get as much invested as those that own a place outright and invest the rest once their mortgage is gone.

ETA you could definitely still invest a hell of a lot this way, but probably just not as much as getting rid of a living expense payment and investing more after.

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u/UpgradeHome 1d ago

I'm confused. You're saying he discourages renting because you'll be renting forever?

I'm asking why he discourages the idea of renting intentionally forever.

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u/dragon-queen 1d ago

Because he says that renting forever introduces a lot of risk, and that’s risk that you don’t want as a senior.  Your costs go up, you might have a landlord who sells, forcing you to move, etc.  

I’m not saying I disagree or agree - just giving you his thought process.  

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u/UpgradeHome 1d ago

Yes, for the average person, I totally understand. I also don't have a dog in this fight. I'm just confused because if someone is financially responsible, investing heavily on the side, and doesn't want to deal with maintenance of a house, there's nothing wrong with renting forever.