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Comment on Is investing in real estate immoral if you use it to buy your first home?

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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Solumbran@lemmy.world ⁨3⁩ ⁨months⁩ ago
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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- Thorny_Insight@lemm.ee ⁨3⁩ ⁨months⁩ ago
  So the government is your landlord then?
  
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  - Fondots@lemmy.world ⁨3⁩ ⁨months⁩ ago
    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.
    
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    Thorny_Insight@lemm.ee ⁨3⁩ ⁨months⁩ ago
    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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ArchRecord@lemm.ee ⁨3⁩ ⁨months⁩ ago
To be clear, I wasn’t talking about liquidations, I was talking about actual market performance. Housing is necessary, even during a financial crisis, whereas unnecessary purchases of goods from corporations become secondary. Thus, housing can stay more stable while stocks crash.

While the market does always go back up, to some degree, I want to be at least slightly more resistant to the possibility of a major failure, (i.e. multiple major tech companies going under from some highly unforseen event) that could lead to entire stocks not existing to go back up again in the future.

I would also theoretically be investing via publicly-traded REIT funds, which could be liquidated in the same manner as stocks.

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?

Not exactly, first off, I mostly mean real estate that is required for survival. Housing, not including the types of places you’d use for a quick vacation stay like hotels, corporate office real estate, etc.

If there weren’t landlords, there would be a significant decrease in housing prices, due to a few factors, namely banks now offering lower-rate loans (since the higher-paying institutional investors are out of the picture), higher supply availability (instead of investor hoarding of empty rentals for property value over use by humans), and generally larger amounts of capital available to spend on new homes, rather than rent payments going to alternative asset classes in wealthy investor portfolios.

It also doesn’t mean no rentals would exist at all, but that properties wouldn’t exist solely for the purpose of being rented. (think someone renting a portion of their existing house, or adding an ADU, instead of buying an entire single-family home solely for the purpose of renting it as an investment.)

Landlording is only a problem because it reduces the supply of housing available for people to own directly, and by the extent of it existing, increases housing values. If existing properties are partially used as rentals by those who have extra space to spare, any of the issues I mentioned functionally don’t exist.

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- Thorny_Insight@lemm.ee ⁨3⁩ ⁨months⁩ ago
  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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  - ArchRecord@lemm.ee ⁨3⁩ ⁨months⁩ ago
    TLDR; I want to protect against systemic risk factors, as most of my net worth will be in the market, unable to support me during a financial emergency. It could also carry possible tax benefits, and make it easier to sustain mortgage payments on a home.
    
    I’m mostly trying to ensure that if, for instance, my entire emergency fund is drained from a major medical emergency (or something similar) during that time, I have something I can rely on that is generally more stable to sell during that time, which will overall carry lower tax implications on sale than stocks that have already appreciated significantly more.
    
    Plus, once I get to the point of being close to owning a home, I want to ensure no major financial event could potentially significantly impact my ability to afford mortgage payments.
    
    I plan on investing as much of my income as I can to retire as early as possible, which means the majority of my liquid cash net worth will just be in my emergency fund, with a smaller additional amount in savings. I would prefer some level of extended, more stable assets, that will still grow at least a bit over time to meet my financial goals, but won’t be subject to as large drops as the whole market.
    
    I don’t plan on investing much of my portfolio into real estate if I do decide to go that route, only 5-10% total, more as a hedge than as a primary strategy. Most of my investing is still in comparatively high-growth index funds.
    
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    ultranaut@lemmy.world ⁨3⁩ ⁨months⁩ ago
    REITs tend to move like the rest of the market. If there’s a big crash they go down like everything else. I think hedging against a big crash the way you’re thinking is probably not going to be worthwhile, you’re not really gaining significant protection.
    
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