Hidden costs many buyers overlook
Real estate investor Grant Cardone continues to challenge conventional wisdom on homeownership, arguing that buying a primary residence is less an investment and more a recurring expense.
According to reports from Investopedia and Yahoo! Finance, Cardone said he prefers renting over paying a mortgage, citing ongoing costs such as property taxes, insurance, and maintenance. Instead, he advocates directing capital toward income-producing properties like multifamily buildings or commercial assets.
Cardone’s stance resonates with some, particularly younger consumers navigating high mortgage rates and elevated home prices. Rising carrying costs, he argues, can erode the financial appeal of homeownership, especially when compared to alternative investments with more predictable returns.
Advisors cite long-term value
Despite Cardone’s criticism, many financial advisors said they still see homeownership as a reliable path to building wealth. Homes in the US appreciate at an average annual rate of 5.45%, outpacing inflation, according to Pathway Capital’s Thomas Ravert. Other advisors, including Leslie Beck of Compass Wealth Management, point to tax deductions and equity growth as advantages that renters miss.
Mark Stancato of VIP Wealth Advisors noted that homeowners gain a stake in an asset while renters often face rising costs without any return. However, some, like Landon Tan of Query Capital, support Cardone’s caution, urging potential buyers to fully analyze hidden costs before committing.
Market Conditions Change the Equation
High mortgage rates have made renting a more financially attractive option in many markets. Data showed that, with rates above 6.75%, the total monthly cost of owning a $430,000 home—including taxes, insurance, and maintenance—can exceed comparable rent by about $400. Financial planner Kirk Reagan calculated it could take more than six years for ownership to break even under these conditions, assuming 4% annual appreciation.
Experts cited by the University of Alabama at Birmingham emphasize that the right decision depends on personal factors like income stability, location, and long-term plans. Renting, they note, offers flexibility and fewer financial responsibilities, while homeownership requires planning for emergencies and budgeting for ongoing expenses.
Advisors recommend that buyers prepare by keeping housing costs below 30% of gross income, maintaining an emergency fund, and setting aside 1%–2% of the home’s value annually for maintenance. For renters, the flexibility to relocate and avoid repair costs can be an advantage, especially in volatile markets.
While most advisors agree that owning a home can build wealth over time, they caution against overextending finances. Renting may make sense for those carrying significant debt or uncertain about how long they’ll stay in one place.
