“I wouldn’t mind just writing a check every month and just be done,” the caller told The Ramsey Show. “I’ve had so much responsibility in my whole life raising my four kids, keeping up with my house.”
Dave Ramsey empathized: “For 20 years you’ve been a she-bear out here fighting, scratching, clawing — and you’ve cleaned the gutters. You’ve done whatever it took, and you’re just tired,” he acknowledged. He admitted that renting would allow her the freedom to not “screw with stuff, because the landlord does.”
But his financial verdict was clear: renting for the next 30 years would be a mistake.
“Think about what rents have done in the last 30 years,” Ramsey told her. “Gone up. And think about what they’re going to do during the 30 years that we’re talking. So if you rent instead of owning a paid-for property going into retirement, you’re destabilizing your life because every year your housing cost is going to go up.”
The caller had floated the idea of buying something smaller outright, like a townhouse, but wasn’t sure if renting for three decades would really make more sense financially.
The case for Ramsey’s position
This caller’s situation makes Ramsey’s argument clear. Illinois has some of the highest property taxes in the country, and she mentioned hers were roughly $1,000 a month.
According to the Lincoln Institute of Land Policy, Illinois has the second-highest effective property tax rate on median-value residential homes among all 50 states, at 2.07% — more than double the U.S. average of 0.98% — with a median real estate tax bill of $5,189, compared to the national median of $2,969.
As high as that is, it’s fixed to the assessed value of the home and doesn’t compound the way rents do — particularly in a market like Illinois without caps on how much landlords can raise rents.
So, on a paid-off property, her monthly housing cost is essentially that tax bill, plus maintenance and insurance. If she rents, that number could rise indefinitely.
But the math isn’t always that simple
Recent Zillow research cited by Forbes complicates the picture. “The question we’re really asking is: when does buying leave a household better off than renting, given today’s actual prices and rents?” Orphe Divounguy, senior economist at Zillow, posed. “It’s math — and the math changes dramatically depending on where you live.”
