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Is investing in real estate immoral if you use it to buy your first home? (lemm.ee)
submitted 2 years ago by to c/nostupidquestions@lemmy.world
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I'm someone who believes landlording (and investing in property outside of just the one you live in) is immoral, because it makes it harder for other people to afford a home, and takes what should be a human right, and turns it into an investment.

At the same time, It's highly unlikely that I'll ever be able to own a home without investing my money.

And just investing in stocks means I won't have a diversified portfolio that could resist a financial crash as much as real estate can.

If I were to invest fractionally in real estate, say, through REITs, would it not be as immoral as landlording if I were to later sell all my shares of the REIT in order to buy my own home?

I personally think investing in general is usually immoral to some degree, since it relies on the exploitation of other's labour, but at the same time, it feels more like I'm buying back my own lost labour value, rather than solely exploiting others.

I'm curious how any of you might see this as it applies to real estate, so feel free to discuss :)

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[–] 8 points 2 years ago (2 children)

And just investing in stocks means I won’t have a diversified portfolio that could resist a financial crash as much as real estate can.

That's nonsense. A house would be equally difficult to liquidate in a financial crash than stocks would. Probably even more so. If you have a diversified portfolio and enough savings so that you don't need to touch your investments then you'll handle crashes like that just fine. The stock market has always bounced back up. Always.

I’m someone who believes landlording is immoral

Wouldn't that then mean that there would be no rental apartments available and everyone would be forced to take a loan and buy a home? To me this kind of thinking is just the opposite far end of the spectrum where as what is optimal is likely somewhere in the middle as is the case with most things.

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  • [–] 4 points 2 years ago (1 child)

    Housing handled by the government leading to removing the requirement to take a loan to buy a house is an option. Landlords are never a mandatory thing, it's absurd to think so.

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  • [–] 0 points 2 years ago (2 children)

    So the government is your landlord then?

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  • [–] 6 points 2 years ago* (1 child)

    They effectively already are, stop paying property taxes on a property that you own and see what happens. They get to set all kinds of restrictions on what you can do with your property, how and when.

    Sounds a lot like a landlord to me.

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  • [–] 2 points 2 years ago (1 child)

    Having rented before and now owning my own house I can gurantee you that there's a major difference in the freedom between those two.

    You think homeowners should not be required to pay property tax and build whatever they want on their property disregarding all safety regulations and building codes? I can definitely see how that would go horribly wrong..

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  • [–] 4 points 2 years ago* (1 child)

    I'm also a former renter, current homeowner, and you certainly get more freedom as a homeowner than you normally would as a renter (although you do sometimes hit the jackpot with a landlord who will let you do anything you want to your rental) but it's not absolute freedom.

    The second half of your comment though, is putting words in my mouth that I didn't say. I agree with building codes, safety regulations, permits, etc. I certainly don't trust the morons living next door to me to not blow their house up and mine along with it because they tried to service their own gas line, and I'm willing to give up that bit of freedom for myself because the benefits outweigh the inconvenience.

    I am, however, not a fan of property taxes, because I'd like to know that if I someday end up disabled, lose my job, and broke, I'd like to know I'd at least be able tocount on having a roof over my head even if I can't afford to keep the heat and lights on, it would keep me out of the elements and provide some physical security. I like everything those property taxes pay for, but I want it to come out of income taxes.

    There's also of course the issue of things like eminent domain and civil asset forfeiture. If the government can just take your home away from you, how real is your ownership of it? Just like how a landlord can decide to evict you or sell the property at any time, sure there's a process they need to go through, but the government has hoops to jump through when they do it as well.

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  • [–] 1 point 2 years ago (2 children)

    I don't know where you live but the property tax on my house is 200€ a year which is less than half of what I spend on groceries every month. If I end up disabled and without a job, the property tax, from a financial perspective would be among the least of my worries.

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  • [–] 2 points 2 years ago

    In the USA, property taxes are how most towns and cities get the majority of their funding. 200€/year would be crazy low.

    In my medium cost of living town (USA), taxes come out to 4, sometimes 5 figures a year. Plus as the area becomes more desirable, property taxes (based on the sale price of a home) go up for recent buyers.

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  • [–] 1 point 2 years ago* (1 child)

    And how crushing would it be if you have no food, no money, no job, and not even a safe place that you're just allowed to exist for want of $200?

    Also the taxes in my area, which isn't even a particularly expensive area for the US are something like 10x that.

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  • [–] 0 points 2 years ago (1 child)

    Well debate about wether taxes are good or not are a whole another discussion. I live in a wellfare state myself so I don't mind the relatively high taxes I'm paying because I've benefited from what the government spends it on my whole life and continue to benefit in the future as well, not to even mention the people less fortunate than me.

    If you're broke, disabled and unable to provide for yourself the government will provide you with an apartment and money for food. 200€ a year is pennies compared to the benefits people like this are receiving.

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  • [–] 1 point 2 years ago

    But if it weren't for property taxes, the government wouldn't need to provide me a place to live as a homeowner, every penny of welfare I would need could go to food, utilities, etc. and that frees up the government provided housing for those who don't already have a place to live.

    And again, I'm not anti tax, just anti property tax, raise the sales taxes, income taxes, etc. to cover things, especially on the wealthy, my house isn't making me any money until I sell it, so why should I be taxed on it like it is?

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  • [–] 3 points 2 years ago

    As a government employee, I have rented from the government (USA) many times over the years. It is a pretty good deal usually. It includes utilities almost always. Sometimes the house is really bad but usually they are ok, and the price per month (they do it by day) is pretty good.

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  • [+] [S] -1 points 2 years ago* (last edited 1 year ago) (1 child)
    [deleted]
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  • [–] 4 points 2 years ago (1 child)

    But what does it matter if the value of your stocks drop in a market crash? Assumeably you're in it for the long run so you can always just wait for them to go back up before selling. Even if a property might hold it's value better during a crash, which is not guranteed either, that would still be irrelevant unless you intend to sell the house, which again would be difficult during a market crash. If you want something that holds it's value that you can liquidate at any time then perhaps you should buy gold instead.

    If you're invested into something such as S&P 500 and something happens which causes a significant number of those companies to go out of business at once, then we're talking about an extremely rare world wide event that'll effect your investments no matter what they're tied into. Keep in mind that the ~7% yearly average growth of the stock market includes events such as both world wars.

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