Dave Ramsey Says Too Many Real Estate Investors Make the Same Mistake and Rising Property Values Don't 'Go Up Fast Enough to Offset a Bad Idea'
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Real estate has helped create countless millionaires, but according to personal finance expert Dave Ramsey, many investors make the mistake of assuming that rising property values can fix a bad investment.
During a recent call on " The Ramsey Show ," Maggie asked for advice about a California condo she and her husband had turned into a rental after moving to South Dakota. The property was worth roughly up to $399,000, carried a mortgage balance of about $309,000 and was barely breaking even as a rental.
"If you had this amount of money piled on the kitchen table, you would never go do this deal," he said. "Not in a million years. No sane person would."
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A Common Real Estate Trap
Maggie explained that her husband wanted to keep the condo because he believed property values would continue rising and renters would always be available. Ramsey said that thinking is one of the most common mistakes investors make.
His issue wasn't with real estate itself. In fact, Ramsey said that much of his own net worth is tied to property investments. The problem was the specific investment.
"Property values in real estate do not go up fast enough to offset a bad idea," Ramsey said. "I'm big on real estate. I want you to own real estate, but this real estate, you don't own this real estate. It owns you."
The couple lived several states away from the condo, making them long-distance landlords . The property wasn't generating meaningful cash flow, and they were still carrying more than $100,000 in consumer debt.
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Would they choose to use that money to buy a long-distance rental in California that barely paid for itself?
The answer, he argued, was obviously no.
"This is a bad deal," Ramsey said. "Sell it. Sell it. Sell it. If this renter doesn't buy it, put it on the market and sell it anyway. Get rid of it."
Why Appreciation Alone Isn't Enough
A lot of investors put too much weight on how much a property might go up in value over time. While rising prices can definitely help your returns, Ramsey says that kind of growth should be a bonus on a solid investment, not something you rely on to fix a bad one.
He pointed out that if the property experienced vacancies, repairs or unexpected expenses, the investment could quickly move from break-even to losing money.
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The caller also revealed that the tenants were interested in purchasing the condo, creating what Ramsey described as a potential "get out of jail free card." Selling could allow the couple to eliminate roughly $108,000 in consumer debt and free up about $4,000 per month in debt payments, dramatically improving their monthly cash flow.
For investors who like the idea of real estate but don't want the challenges of being a landlord, alternatives have become increasingly popular.
Arrived Homes lets you buy fractional shares in professionally selected rental properties without dealing with tenant issues, maintenance calls or property management. Arrived Homes' expert team carefully vets properties for appreciation potential and rental income opportunities while handling the day-to-day responsibilities typically associated with owning rental real estate.
Read Next: Wall Street Traders Pay Thousands For Market Data. This Platform Gives Everyday Investors Access To Advanced Tools.
Building Wealth Across More Than Just the Market
Building a resilient portfolio means thinking beyond a single asset or market trend. Economic cycles shift, sectors rise and fall, and no one investment performs well in every environment. That's why many investors look to diversify with platforms that provide access to real estate, fixed-income opportunities, precious metals, and even self-directed retirement accounts. By spreading exposure across multiple asset classes, it becomes easier to manage risk, capture steady returns, and create long-term wealth that isn't tied to the fortunes of just one company or industry.
Arrived
Backed by Jeff Bezos, Arrived Homes makes real estate investing accessible with a low barrier to entry. Investors can buy fractional shares of single-family rentals and vacation homes starting with as little as $100 . This allows everyday investors to diversify into real estate, collect rental income, and build long-term wealth without needing to manage properties directly.
FarmTogether
Farmland has historically held its value through market volatility and delivered returns uncorrelated to stocks and bonds. For accredited investors, FarmTogether offers direct access to high-quality U.S. farmland starting at $15,000 — fully managed, with no landlord headaches.
Immersed
Immersed is building technology for the future of work through spatial computing. Known for its AR/VR productivity platform that enables users to work across multiple virtual screens, the company has grown to more than 1.5 million users worldwide. Immersed is also developing Visor, a lightweight headset designed specifically for professional productivity, positioning the company at the intersection of remote work, extended reality (XR), and next-generation computing.
Fundrise
Private real estate and private credit can add income and stability to a stock-heavy portfolio. Fundrise offers access to diversified private real estate and credit strategies through an easy-to-use platform, with professionally managed portfolios designed to generate passive income and long-term growth.
Realberry
Institutional-quality real estate has traditionally been difficult for individual investors to access. Realberry gives accredited investors direct access to private real estate opportunities backed by a team with 35 years of experience, $3.4 billion in assets under management, and $481 million in cumulative distributions paid to investors as of Q4 2025, according to the company. With a portfolio spanning 13 million square feet across seven U.S. states, Realberry focuses on acquiring, developing, and managing real estate with an emphasis on long-term value creation while its principals often invest alongside clients to help align interests.
Mode Mobile
Mode Mobile is changing the way people interact with their phones by letting users earn money from the same apps and activities they already use every day. Instead of platforms keeping all the advertising revenue, Mode Mobile shares a portion back with users who engage with content, play games, and scroll on their devices. Named one of Deloitte's fastest-growing software companies in North America, the company has built a large beta user base and is scaling a model that turns everyday smartphone usage into a potential income stream.
EquityMultiple
For accredited investors looking beyond stocks and bonds, EquityMultiple provides access to vetted commercial real estate deals starting at $5,000 , with only ~5% of opportunities passing their due diligence process.
Image: Shutterstock
This article Dave Ramsey Says Too Many Real Estate Investors Make the Same Mistake and Rising Property Values Don't 'Go Up Fast Enough to Offset a Bad Idea' originally appeared on Benzinga.com
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