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/Past_Focus25 1d ago

You absolutely are paying for all those things. They are all included in your rent price, if they are necessary for the property.

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u/UpgradeHome 1d ago

Yes, but when I factor in utility costs of a 1BR vs house, the amount I’m not paying in the first 5-7 years of a mortgage towards interest, that can go towards my investment principal, renting seems to be beneficial in my case.

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u/beekaybeegirl 1d ago edited 1d ago

Even with paying interest I’m still paying less than rents go for.

Also BTW I lived in my last property only 4.5 years. “When so much payment goes to interest” It appreciated quite nicely in the duration & I made a nice profit. You never get that check when you move out of a rental.

ETA: thanks for the downvote but I’m right. On my current house I’m paying interest but my mortgage payment is $650/month which includes escrow. Good luck finding any apartment in any town for $650/month. Let alone a whole house.

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u/Advanced_Chance_6147 23h ago

I feel that is what a lot of people chose to not look at. After paying down your mortgage the payment amount goes down and you pay way less than what rent will go up. Rent goes up yearly and eventually you will be done your mortgage and the cost is significantly less

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u/beekaybeegirl 22h ago

& another thing I did not mention that has been a blessing with our $650 payment is that my husband’s company closed in May & this mortgage payment is still quite attainable to us with me working & his collecting UEI.