In his co -ing radio show, Dave Ramsay He addressed the growing debate about hiring against ownership while talking to a 58-year-old homeowner in Chicago, who is considering reducing and selling his house of $ 350,000.
One of the factors in her solution was her well -established emergency reserve and $ 1 million for $ 401 (k), maintaining her sufficiently funded for her upcoming retirement.
While hiring a purchase may look safe and financially healthy for some, Ramsay told her that she could become a “victim in the real estate market” if she passed with him – other experts agree.
What Dave Ramsay advises pensioners – and how tenants compare today
“Hiring for 30 years means that you are a victim in the real estate market instead of riding the wave,” Ramsay explained. “Think about what the rents have done in the last 30 years and think about what they will do in the 30s we are talking about.”
Steve SextonCEO of the Sexton Advisory Group, agrees with Ramsay that hiring an indefinite time can become a financial trap, especially for someone with strong income and savings.
He notes that the rents have climbed dramatically in recent years, and for many people who are approaching their retirement, this instability can violate a well -planned budget.
“If you are financially disciplined and understand your monthly expenses, locking a fixed mortgage can give you a long -term predictability while turning your monthly housing costs into your own capital, not just expense,” he adds.
Ramsay suggested another option that may have a financial meaning – especially for older buyers and sellers: Reducing the apartment.
Reducing can be a healthy move for older homeowners and can save them thousands of dollars, especially when retiring and switch to fixed income.
The listener explained that she no longer wanted to deal with the troubles of a big house, as her children were moving and she was tired.
With this in mind, it is clear to understand why she was considering hiring: when hiring, repairs and problems take care of you, which relieves much of the headache and the cost of ownership of housing.
But up to Ramsay point, hiring may be no more financially than reduced to a smaller home, given the high transaction costs in Chicago.
According to Realtor.com®, the average rent for one to two bedrooms in Chicago was $ 1.793 in May, welcome with a 1.5% decrease at the age of age, but an attracting look at a 15.1% six -year change.
A report on Realtor.com also notes that 25% rates for steel and aluminum can increase rents prices, “Since developers can delay construction or go higher costs for tenants.”
Meanwhile, the average price of the Chicago home list in June was $ 350,000, with the average price of the home list per square foot being $ 276, according to Realtor.com. This price is below the national average price of $ 440 950 for homes in June.
Bobbi rebellA certified financial planner and a personal finance expert at Cardrates.com says that this situation reveals that not all homeowners are the same.
“She can get the benefits she wants from hiring by purchasing an apartment: low practical support, for example, having a home with lower maintenance. In particular, buying a new apartment that has services built through an association of homeowners, it can get the easier and less stressful lifestyle she wants,” she adds.
Rebell notes that the challenge of hiring, especially when you are moving in retirement years, is that it can be a risky financial because you are at the Lawner’s fad.
“Not only can the landlord raise your rent, but it can just decide that he no longer wants to rent the unit and ask you to leave.
Stacey BrownThe senior director of real estate management says that for persons who have been financially disciplined and have clarity around their monthly budget, a fixed mortgage with a fixed percentage (even at accidental maintenance costs) may be more controlled in the long-term uncertainty of the uncertainty of the annual increases.
“In addition, property offers hedging against inflation and the ability to build or maintain justice,” she added.
Why an apartment can be the best of the two worlds in Chicago
That is why Ramsay offered the calling alternative. Moving to an apartment can be the best of both worlds, as this would be a reduction while not losing money.
He pointed out that at the level of her own capital, which is about $ 350,000, she can afford an apartment with a lower cost, less maintenance and less unknown.
The average price of Condo in Chicago is about $ 350,000 in 2025, according to Realtor.com.
While Kondo is a price in a similar way to her current home, he offers advantages as Hoa-managed support and predictable costs that can be particularly attractive to retirees.
Brown also notes that in Chicago, where ownership taxes, snow removal and maintenance can be discouraging, Condo’s life can offer the perfect hybrid model.
“The buyer acquires ownership and retention of equity, but with common responsibilities and often more common maintenance costs,” she says. For someone with $ 350,000 in home capital, it is quite possible to buy a modest, well -managed apartment straight or with a small mortgage, leaving retirement savings untouched or minimally affected.
Rubble adds that an apartment with new appliances and finishes is unlikely to need maintenance and is a great situation for someone who wants to reduce their practical participation in their home.
“If the apartment has HOA, it can serve as a way to avoid directly daily involvement in maintaining the grounds or any maintenance of the building and keep up with an easier and less stressful lifestyle,” she adds.
This option can make sense for people in the situation of this call, as it allows them to possess without exaggeration and maintain the ability to release some of these 401 (k).
Sexton notes that another key point in Ramsay’s advice is the focus on buying within your funds.
“I always tell my customers that just because they can afford more, it doesn’t mean you have to buy higher. Later in life, you want to maintain access to your pension accounts rather than overdoing yourself. Buying a home must strengthen your financial position, not to set it up, if you can buy something managing, while saving at the same time. Flexible retirement, “he adds.