Grant Cardone Questions Homeownership Investment

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Real estate investor Grant Cardone recently challenged the conventional wisdom that buying a home is always a solid investment. In a recent interview, Cardone explained that he primarily rents, arguing that renting can be more financially practical than owning a home. He noted that homeowners face additional costs such as property taxes, maintenance, and repair expenses that renters avoid.

Cardone’s perspective has sparked debate among financial advisors, many of whom continue to view homeownership as a key pathway to building wealth.

“From an investment perspective, homeownership remains the single most reliable path to long-term wealth creation for everyday families,” said Thomas Ravert, a certified financial planner (CFP) at Pathway Capital. He noted that homes typically appreciate by about 5.45% per year, exceeding the average rate of inflation.

Mortgage payments can also provide financial benefits beyond home appreciation. Leslie Beck of Compass Wealth Management explained that mortgages offer potential tax deductions and long-term growth opportunities, while rent payments do not. Beck added that renting’s flexibility can be unpredictable, as landlords may sell properties or raise rents, and moving frequently can erase potential savings.

Mark Stancato of VIP Wealth Advisors emphasized the value of building equity through homeownership. He argued that renters face “rising payments, zero return, and no stake in the asset.” While homeownership may not suit everyone, Stancato said calling it a liability is “misleading and irresponsible.”

Some advisors, however, see merit in Cardone’s caution. Landon Tan of Query Capital told Investopedia that many buyers underestimate costs such as insurance, taxes, and home repairs. “Viewing a home primarily as an investment can also encourage spending on upgrades that would not occur in a rental,” he said, advising buyers to conduct a “thoughtful analysis” of their individual situation.

In today’s environment of high mortgage rates, some financial advisors note that renting may offer advantages. Luke Harder of Claro Advisors said that avoiding a mortgage can allow renters to save or invest funds that would otherwise go toward interest payments.

Madeline Maloon of California Financial Advisors advised prospective buyers to consider their readiness for homeownership. She recommended establishing an emergency fund covering up to a year of expenses, ensuring a stable budget for savings, covering other debts, and accounting for closing costs.

Clark Randall, CFP at Creekmur Wealth Advisors, highlighted the importance of the length of stay in a home. “A longer stay generally makes buying more financially advantageous,” he said, noting that fixed mortgage payments eventually disappear, even as taxes and insurance rise. For short-term stays, renting often makes more sense due to lower upfront costs.

While Cardone emphasizes the costs of homeownership, most financial advisors maintain that owning a home can be a reliable way to grow net worth over time. However, the decision to buy or rent depends on individual circumstances, including finances, lifestyle, and long-term plans. Advisors caution against becoming “house poor,” where too much income is devoted to homeownership at the expense of savings or other spending.