Note that I am playing devil’s advocate here in order to tease out some of the nuances in people’s thinking because I believe it’s important for us all to understand the details and I’m not convinced many have thought it through. Hence the knee-jerk reaction to downvote
They are buying up a limited supply of properties that exist in desirable areas and then charging people for the right to use them plus a nice profit for themselves. This reduces the supply for a necessary good and drives up prices…
This describes any financial transaction in a capitalist system.
but you can also just be putting money into a business so that it has more money to grow its operations
And how is this different from buying a product like a house and renting it out? Would any such distinction apply to, say, renting out a car or renting out your services? And “renting” a product isn’t really different from services or a cycle of buying low and selling high for anything other than the terms of the contract.
or you can invest it in a business that lets them use those resources now and lets you get your retirement money back 30 years from now when you need it
So like investing in real estate. For years that was considered kind of the gold standard of “safe” investments and generally providing a net annual return of about 5%.
That’s how investment can be a net benefit to society
I’m not convinced any investment can be a “net benefit” to society in a capitalist system. But proponents of renting out property argue it provides a “net benefit” by providing a needed service (housing) to those that aren’t themselves in a position to buy. It is inherently usurious, just like everything capitalist.
So for me, bottom-line, the only valid argument to support making a distinction between real estate “investment” and other kinds of “investment” is to say that housing is a basic human right. And if you are going to go there, why not make other things human rights like happiness, a life free from financial stress, a life of fulfillment. From my perspective that leads to the inescapable conclusion that capitalism is inherently inhumane and thus any kind of investing is immoral.
masterspace@lemmy.ca 1 month ago
No it does not. If I pay you to build a water desalinating machine then suddenly we’ll have an abundance of fresh water. We’ve increased the available supply of water overall.
Similarly building more housing is not as morally bankrupt as buying up existing housing and renting it back out at a profit. If you actually build more housing, you are providing a service, if you only get paid for the hours you work and you only make a reasonable amount of money, you might actually be net benefit to society as a whole.
On the other hand when you live in a city where there is a limited supply of housing and you buy that up and rent it back to people at a profit so that you don’t have to work, you are simply draining the system of resources.
There is a reason that economists literally use the term ‘rent-seeking’ to describe behaviour that is personally profitable while draining the efficiency of the system as a whole, and not all types of businesses are considered to be rent-seeking.
enbyecho@lemmy.world 1 month ago
Oh yes it does.
And then you charge up the wazoo for a basic human right.
Ah. It would appear you believe that somehow buying a property and renting it out does not require financial risk and effort like any other product or service. Renting out housing, despite frequent appearances, requires maintenance and expenses in order to reap a profit. What you are describing would more accurately describe investments in stocks or bonds which do not require anything but capital on your part.
" economists literally use the term ‘rent-seeking’ to describe behaviour"
Except those same economists argue that renting out housing is productive. And that’s not in fact the origin of the term. The classic example, according to the wikipedia is charging money for boats to pass a section of river. The term does not refer to housing, which requires a reciprocal exchange - you build or buy the house and maintain it and in exchange you are paid for it’s use.
To repeat because I have to: I’m not arguing this is good. I’m arguing that a distinction between types of capital investment cannot be made. You can say landlords are universally bad but other types of capitalists are good, universally or otherwise. It’s the same damned thing.