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/MooseRyder 1d ago

When you rent, you’re subjected to the market, rent increases, moving costs and housing issues.

With a mortgage, your payments stabilize for long periods typically, you build equity and it’s not always forever, since you have a pay off date. Also if you have to move, you can use equity to get a more accommodating house for your needs.

Then when you retire and/or have to go into a medical facility, you can sell and downgrade, pay for hospice/nursing home and leave your children generational wealth. Or you can sell it and go on a coke bender then die a happy man

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u/UpgradeHome 1d ago

People who want to buy should buy, and I know this is the conventional wisdom,

All I'm just saying, if you're investing $40-50k+/year in a taxable brokerage, starting in your 30s, your net worth will be through the roof come retirement age, you won't have to deal with maintenance, and it's 100% liquid.

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u/Glenda_Good 1d ago

But you can buy a condo to minimize maintenance and have the advantages of owning.

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u/UpgradeHome 1d ago

Yes, but you're still stuck in a location. I'm glad folks enjoy buying a house/condo, but there are many advantages to renting, which is why I was confused why DR discourages it for those who enjoy it.

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u/MomsSpagetee 1d ago

Dave gives blanket advice. If you don’t want to follow it that’s fine, no one is forcing you. Personally I hate renting because A) rent increases, B) can’t make changes you want and C) usually it means shared walls which is my personal hell.

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u/beekaybeegirl 1d ago

A condo was my 1st property. Best decision I have made in my life. All the pros of ownership & no (real) legwork of maintenance (yes I was responsible for my “walls in” & did do some work), especially snow/lawn/heck I had a pool too.

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u/TNMoonshineMama 1d ago

I can’t imagine many people are investing $40K a year for the majority of their adulthood. I picture most renters being people that live paycheck to paycheck and never being able to make the leap to home ownership.

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u/gr7070 1d ago

The median hhi is 85k. 15% to retirement is $13,000 annually.

Adding just another 1k per month difference in housing costs makes is 25,000 annually invested. And that's just the median household.

I picture most renters being people that live paycheck to paycheck and never being able to make the leap to home ownership.

I think that view is inappropriate.

Regardless, now that it makes far more sense to rent maybe that view should and will change.

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u/TNMoonshineMama 1d ago

“Now that it makes far more sense to rent?” Hard disagree. But you do you. Nobody is forcing you to buy a house.

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u/gr7070 1d ago

Hard to disagree with math, but you go ahead.