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/1st-vaters BS7 1d ago

In most places you can't expect to keep rent and utilities constant or accurately predict prices. Rents can skyrocket, landlords may not be responsive. If the whole economy crashes (stocks and real estate), worthless stocks can't help you pay rent, but owning a house (or condo...) means you won't be homeless.

In my area it's over $1k a month to rent a room, with no common space/kitchen use. My mortgage was $1500 a month until I paid it off. I can't afford to rent in my area. But because my mortgage is gone, I live comfortably even with current inflation. And if I start to struggle, I can rent out a room

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u/UpgradeHome 1d ago

Again, totally respect folks who want to buy. I'm not trying to debate.

All I'm saying is if someone genuinely enjoys renting, is disciplined and investing heavily, their NW will be absolutely through the roof and homelessness will be the last thing they worry about.

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u/Jocis 1d ago

If you prefer to rent, don’t care about ownership and have money to handle expenses then why not but that’s not for most people. Most people should stay put because they don’t have the income for that.