Dave Ramsey on Real Estate: Why One Investment Strategy Keeps People Broke

When it comes to building wealth through real estate, conventional wisdom suggests multiple pathways to success. REITs, property flipping, and landlord ventures all appear on the menu of investment possibilities. Yet not every strategy delivers equal results, and Dave Ramsey—a renowned financial expert and author—has made his stance particularly clear on one approach: mobile home ownership is a wealth trap, not a wealth builder.

The Depreciation Problem

Ramsey’s reasoning is straightforward and backed by arithmetic: mobile homes lose value over time, much like automobiles. The comparison is deliberate. “You’re essentially purchasing a vehicle designed for sleeping,” he explains, emphasizing that when you invest money into depreciating assets, you’re moving in the wrong financial direction.

The numbers tell the story. Consider a $55,000 mobile home purchased today. A decade later, it may be worth only $10,000. That’s not just a minor decline—it’s financial erosion. Ramsey’s core principle is unforgiving: “Buy things that gain in value, not things that lose it.”

The Land Illusion That Deceives Investors

Here’s where many mobile home owners feel they’ve made a smart move—and Ramsey says that’s where they’re fooling themselves. While the dwelling itself depreciates rapidly, the land beneath it may appreciate. Owners often confuse these two dynamics, believing they’ve profited when they haven’t.

As Ramsey puts it directly: the land’s appreciation creates a false sense of accomplishment. The mobile structure loses value quickly, but the underlying real estate climbs in price. Most owners credit themselves with financial wisdom when they’re actually being “saved” by the dirt beneath the structure, not by their own investment decision.

Renting vs. Owning: Which Costs Less?

On the surface, renting appears wasteful—you’re paying monthly without building equity. Ramsey argues that despite this downside, renting a home is still preferable to owning a depreciating mobile home. At minimum, your rent payment isn’t going toward an asset that’s shrinking in value.

However, the argument isn’t entirely one-sided. Mobile home owners retain one advantage that renters don’t: the ability to eventually sell the property and recover at least some capital. This salvage value—however modest—beats the permanent loss associated with rental payments.

The Broader Wealth-Building Lesson

Ramsey’s critique of mobile home investing goes beyond real estate. It illustrates a fundamental wealth principle applicable to any investment: understand the asset class before committing capital. Assets that decline in value—whether mobile homes, depreciating vehicles, or similar purchases—are wealth drains, not wealth engines.

The takeaway for anyone pursuing financial growth isn’t that all real estate is bad; it’s that you must invest in assets with strong appreciation potential. Mobile homes simply don’t qualify.