Daniels lives in San Diego and could buy, but “right now, it is not a financially smart decision, even though the traditional narrative is that it always is,” she says. Currently, she spends $3,000 per month on rent in Southern California, which affords her 1,000 square feet of space in a central location and access to a fully furnished backyard. To buy something similar, she’d expect to pay at least $600,000 for a condo. “I don’t like the idea of having to save $120,000 in cash for a 20% down payment and tie that all up in one asset,” she says. “And if I don’t do that, then I’m looking at having a $6,000 a month mortgage.” Of course, that doesn’t take into account HOA fees, property taxes, or repairs that may come up down the line.
Because she’s choosing not to put homeownership above all other financial goals, critics might argue that she’s throwing away money, but she disagrees. “We don’t think about that in any other way that we spend money,” she contends. “Renting is not a liability for me. It’s just a cost to live somewhere.”
By the same logic, there are many places where homeowners “throw away” money too. In 2023, Zillow found that buyers can expect to pay around $15,000 annually in “hidden fees”—things like property taxes or utility payments—in addition to maintenance or other bills. In some markets, this can go up as high as $22,000.
It’s for many of these reasons that an increasing number of personal finance experts have denounced home-buying and prompted the public to rethink a primary house as a guaranteed path to financial stability. Robert Kiyosaki, author of the popular personal finance book Rich Dad, Poor Dad, agitated many people when he wrote that a house is not an asset, but rather a liability. When the book came out in 1997, this contrarian advice was heavily scrutinized. However, within a decade, the United States was in the midst of one of the greatest housing market crashes in recent history, proving his point. Others like Ramit Sethi, host of Netflix’s How to Get Rich, and Kristy Shen and Bryce Leung, authors of Quit Like a Millionaire, have also questioned the viability of home-buying as a financial tool.
Building wealth without owning a home
Daniels recognizes an important distinction that is often left out of the traditional home-buying narrative: Housing doesn’t have to be a money-making venture. It can just be where you live, ideally a place that makes you feel happy, comfortable, and safe. “Could I go buy a home in the middle of nowhere? Yes, I could,” she says. “But do I want to do that? No. I want to live in San Diego.”