Renting Is Better Than Buying? Ramit Sethi’s Controversial Take on Wealth

Andrew Lisa

Sun, Apr 27, 2025, 4:06 PM 5 min read

Navigating real estate is much more than just saving for a down payment. Before you invest, it’s recommended to seek the advice of financial advisors and success stories.

Ramit Sethi is a self-made millionaire with an estimated net worth of about $25 million, the star of the Netflix series “How to Get Rich,” the author of “I Will Teach You To Be Rich” and a member of our 100 Most Influential Money Experts list. This is a pretty solid resume when it comes to personal finance.

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Sethi believes that investing is the best way to combat inflation. However, when it comes to real estate — the investment that most people regard as the gateway to generational wealth — Sethi has a take that can be described as unconventional, if not highly controversial. Let’s explore.

For generations, Americans have viewed homeownership as the ticket to middle-class stability and a hallmark of financial success. However, Sethi told CNBC last year that he believes America’s collective aspiration to own property has become a “religion.”

He feels that the tendency to associate renting with failure compels many people to rush into buying without analyzing such factors as paying property taxes, homeowners insurance or even maintenance costs. Considering that a house is the biggest investment that most people will ever make, not to mention the most upfront cost, Sethi said he’s “tired of the blind obsession with homeownership in America.”

Sethi bases his position on three points:

• His rejection of the common assumption that renting a home is always a waste of money that pays your landlord instead of paying yourself in the form of equity;

• His assertion that stocks have delivered better returns than real estate even with the recent surge in home prices across all housing markets;

• His insistence that homeownership comes with a laundry list of secondary expenses that renters avoid on a monthly basis.

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It can get complicated when weighing the costs of mortgage payments versus monthly rent. However, when referring to typical aspiring homeowners, Sethi outlined it like this on X:

“They see this:

• 2-bedroom house for $1,600 rent

• 2-bedroom house for $1,600 mortgage

And think: ‘Same price? I should build equity!'”

But he suggested that only the renter truly pays $1,600. He wrote, “Rent is the MAXIMUM you will pay, but a mortgage is the MINIMUM you will pay.”