Real Estate Mogul Claims Owning a Home Is More Expense Than Investment—Financial Advisors Push Back Hard

Forget everything you've been told about homeownership. One industry heavyweight just dropped a bombshell that's shaking the foundation of the American Dream.

The Contrarian View

This real estate mogul—who's built fortunes on property—now argues your primary residence drains cash instead of building wealth. Calls mortgages 'glorified rent payments with extra steps' and property taxes 'the ultimate subscription service you can't cancel.'

Advisors Fight Back

Financial professionals aren't buying it. They point to decades of data showing real estate outperforms most traditional investments—especially when you factor in leverage. One advisor quipped, 'This sounds like someone who wants to rent you their properties instead.'

The Hidden Costs Exposed

Maintenance, repairs, insurance, and transaction costs do add up. But advisors counter that rent payments vanish completely—while mortgage payments build equity. Plus, you can't live inside your stock portfolio.

Timing Is Everything

With interest rates fluctuating and housing markets cooling in some areas, the debate heats up. Maybe the real truth lies somewhere between 'forever home' and 'financial anchor.'

One thing's clear: in today's economy, even experts can't agree whether your front door leads to wealth or just another monthly bill. But then again, Wall Street always hated competition for your investment dollars.

Key Takeaways

• Real estate investor Grant Cardone said recently that he believes renting is superior to owning, as it can allow a renter to avoid large expenses that come with owning a home.
• However, several financial advisors told Investopedia that they disagree, and said owning a home remains a reliable long-term investment.
• Still, many said it's important to evaluate your own situation to make sure you are financially healthy enough to buy and maintain a home.

The conventional wisdom about buying compared to renting a home is that owning a home provides you with an investment that will reliably increase in value over time, though not everyone in the industry agrees with that perception.

Real estate investor Grant Cardone said in a recent interview that he primarily rents, and said he WOULD rather pay for rent than a mortgage because renting also means avoiding the range of other costs associated with homeownership like property taxes and maintenance costs. However, some financial advisors disagree with Cardone's perception that homeownership is more of an expense than an investment.

Owning a Home is Important Step For Many, Advisors Say

"From an investment perspective, homeownership remains the single most reliable path to long-term wealth creation for everyday families," certified financial planner (CFP) Thomas Ravert of Pathway Capital told Investopedia, noting that homes on average appreciate in value by about 5.45% annually, higher than the average rate of inflation.

There may be other financial benefits too. A mortgage "provides tax deductions as well as growth opportunities, while rental payments do not," said Compass Wealth Management's Leslie Beck, adding that some of renting's flexibility benefits could change quickly like the owner selling the property or rent rising substantially, while moving frequently when renting can also be costly and negate some of the savings compared to owning a home.

Some buyers may value building equity in the home they buy. Mark Stancato of VIP Wealth Advisors said that renters are forced to contend with "rising payments, zero return, and no stake in the asset," adding that while homeownership may not be for everyone, it's "misleading and irresponsible" to simply call owning a home a liability.

However, not all advisors disagree with Cardone so strongly. Some like Landon Tan of Query Capital told Investopedia that the "benefits of home ownership are overblown," as people ignore costs like insurance, taxes, and repairs. "The idea of home as an investment also encourages people to spend more on home modifications that would never have occurred to them in a rental," Tan said, recommending that potential buyers conduct a "thoughtful analysis" of their situation and what would be best for them.

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Buying vs. Renting: Some Factors To Consider

While many advisors agree that owning a home remains a reliable long-term investment, they also agree that it's not necessarily the best route for everyone.

In a high-mortgage rate environment like the one homebuyers currently face, some advisors like Luke Harder of Claro Advisors say that "renting has become relatively more attractive" as avoiding a mortgage can provide more savings when rates are high and those savings can be invested.

Buying a home is a huge financial commitment. Madeline Maloon of California Financial Advisors said that it's important to consider whether you are "ready for the financial burden of owning a home." Maloon also suggested making sure you have an emergency fund of up to a year, a budget to confirm you'll still be able to save when owning a home and have enough for things like closing costs, and ensuring other debts are taken care of first.

One of the most important factors to keep in mind is how long you expect to live in that home, according to Clark Randall, a CFP with Creekmur Wealth Advisors.

"A longer stay generally makes buying more financially advantageous: mortgage principal and interest (with a fixed rate) remain steady and eventually disappear, even though taxes and insurance will rise. If you expect only a short stay, renting is usually better since you avoid the upfront costs of a down payment and closing," said Randall.

The Bottom Line

Most advisors disagreed with Cardone's perception that renting is mostly superior to buying, as they believe more in the idea that owning and staying in a home remains a reliable long-term investment that can boost your net worth. Still, others cautioned that the decision to rent or buy depends on each person's situation and warned against becoming "house poor," or investing too much of your income on owning a home and not leaving enough for savings or other spending.