Rentvesting kills the economy

[el kaka22]

Growing in real estate is important because of two main reasons. We have more people in the world than ever before, and we are growing quite large, even though it looks like the number is dropping because of birth rates, the reality is that we still have regions that are growing faster, and we have more people than houses at the moment so we need to build more houses to house all those people.

Secondly and unfortunately more importantly, we have to rebuild some of the houses, which means we can't just build a house and let it be for a thousand years, we have seen these be a bit different and for that reason we have to tear it down and build it again or at least renovate it. This is why we end up constantly constructing things all the time and will never end.

[Fara Chan]

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it’s not totally unheard of that a country experiences brain drain wherein the educated ones leave the country to work somewhere else because other countries have better pay and benefitd

This is often the case in countries where wages are still quite low, leading many people to emigrate to other countries in search of higher income, perhaps because their own wages are barely enough to live on. I believe this is perfectly normal for citizens of certain countries, as everyone desires a better income and the goal of making their own families happy after achieving success in a foreign country. What's truly unfortunate about this situation are those who are unable or unwilling to emigrate and are forced to resign themselves to their current circumstances, hindered by their ability to move elsewhere.

[lixer]

Government and the collective population does not only focus on real estate, I think they are into construction company, production company like factory. And this create employment opportunities for many. All may not be listed here but I believe they have other cooperate organization that creats employment opportunities like the schools, hospitals, local government council, Banks and many others. Let us not only look into real estate.

Of course. If possible, all things must be balanced for a better life/economy. But, there are truly other sectors out there where the economy can also benefit and not just the real estate one. The construction business that you are talking about there, cannot lead for dead economy which is what OP's concern here. When a real estate property promoted to a business like you mentioned in your list, it will generate money or at least will cycle the money which is more than enough for growing the economy of a country.

If our investment is locked at one place like in gold or in piece of land then it would benefit only the holder and not others and then economy of a country. So, OP is right. Our investment should not benefit only us but may help others in indirect way. Investing in stocks is that kind. Companies will benefit when we buy their stocks and company will sell more or profit more and will hire more people and will trigger the growth of country's economy in one or other way.

[Royal Cap]

Government and the collective population does not only focus on real estate, I think they are into construction company, production company like factory. And this create employment opportunities for many. All may not be listed here but I believe they have other cooperate organization that creats employment opportunities like the schools, hospitals, local government council, Banks and many others. Let us not only look into real estate.

Of course. If possible, all things must be balanced for a better life/economy. But, there are truly other sectors out there where the economy can also benefit and not just the real estate one. The construction business that you are talking about there, cannot lead for dead economy which is what OP's concern here. When a real estate property promoted to a business like you mentioned in your list, it will generate money or at least will cycle the money which is more than enough for growing the economy of a country.
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I think you both got the point just the focus is a little different. It is true that governments or large corporations invest in various sectors not just real estate. These sectors together create employment in a country. Without schools, hospitals, banks, factories the economy would not be able to function. But what the OP is saying is not to be dismissed. If investment is limited to things like land and gold then it actually creates very personal profits and does not do much for the country. The economy then stands still, does not move forward. Real estate itself can then become trapped in a cycle, personally I think the best thing for the economy is for money to move and work, It could be the stock market, technology companies or anywhere where investing creates new jobs and benefits people.

[DrBeer]

Rentvesting kills the economy because it doesn't evenly distribute wealth and that's your point OP, but have you considered that maybe entrepreneurship is a way better investment than investing in real estate, but it is difficult to find investors and when you do, the banks use taxes to take a fair share.

If governments would invest more in entrepreneurs growing, in research and development, in agriculture and food production, a lot of the issues revolving around of poor economy would be unimportant because the economy would have enough jobs, housing would be cheaper as well as labour and wealth would be distributed evenly from diverse sources.

In order for the government to invest, it must have free money. The government (state) has no money other than taxes; the state does not engage in business. Of course, the state can print new money, but this will further damage the economy.
Therefore, the state can only promote business development through various support methods, without investment, such as tax cuts or the creation of tax-free zones.
Therefore, we ourselves must look for ways to improve our standard of living, rather than wait for handouts from the state.

The argument about rentvesting killing the economy comes from the idea that wealth becomes locked in property instead of circulating through productive sectors. but when you look deeper entrepreneurship often gives far better returns for the whole economy. the problem is that starting a business is risky and finding investors is hard and banks take a big share through taxes and interest. if governments supported entrepreneurs research agriculture and real production more aggressively the entire economic structure would become healthier. more jobs more innovation and lower housing pressure because wealth would flow from many sources not just property.

But for a government to invest heavily it needs free money and most governments do not have that. the only money they have is what they collect from taxes. the state does not run businesses so it has no natural income. printing new money creates inflation and causes even more damage. so the only realistic path is for governments to support business in indirect ways like tax cuts incentives and special zones where companies can grow without heavy regulation.

I agree that for the economy to function properly, money needs to circulate and the “consumption” model needs to be implemented.
And “freezing” money in real estate can seem like a really negative factor. On the other hand:
- it stimulates the real estate market, which means jobs in related industries, taxes, etc.
- if we are talking about residential real estate, it creates comfortable living conditions, which will make the city attractive to new people who can improve the economy of the settlement
- if we are talking about non-residential real estate, it provides opportunities to launch new production, create jobs, and generate taxes.
A really bad option is to put money in a safe and keep it there without moving it. I use a reinvestment model to some extent. This year, I managed to buy non-residential real estate in a large residential complex, and now it is being rented out.
 Part of the space is occupied by a pharmacy, and the other half by a small private grocery store. This way, I receive rent, and the asset itself remains at my disposal, remaining highly liquid and benefiting other people. Although I could have bought gold bars with this money and just kept them at home

[shield132]

Rental Property Investment or can be called rentvesting is a type of investment wherein you invest in real estate whether to live on it, rent it out, or build business on it. A lot of people dream of owning lands or rental property but this might actually is what kills the economy. Imagine the type of jobs that real estate generate. There are engineers, architects and construction workers. But once the building gets built, there will be no more jobs from that real estate or there's less.

Now look at rich countries. What do they have? They have invested in research & development which is why they have the leading brands all over the world. Korea has Samsung. Germany has Mercedez-Benz. Japan has Toyota. And many more. The companies in which these are made from generate jobs and it allows the economy to circulate well. Not only does these industries provide employment they also provide exports.

If the government or the collective population only focuses on real estate, there's little to no productivity in the economy. I am not saying real estate should not be on your lists of investment option of course balance must be well maintained however people must stop being so risk-averse because it is what slows down the economy.

Real Estate is a very important part of the economy and its development doesn't kill the economy. When the population is increasing and companies are opening factories or warehouses, we need buildings to fulfil their goals. Real Estate generates massive ongoing employment after it is built. Houses often get damaged and house owner needs plumbers and electricians to fix the things. Houses also often get renovated and it creates jobs for builders. Besides this, houses create a new job for house cleaners. Every house also needs a security service and it's an extra job. When the area gets populated, new supermarkets and other stores are opened near that area. In other words, it boosts the economy and this last sentence is a clear example of that.

Restricting real estate investment doesn't automatically redirect capital into innovations, it's more complex than a zero-sum choice. You also mentioned Germany, which has a high real estate investment but at the same time, also leads industrial innovation.

[coolcoinz]

I am not saying real estate should not be on your lists of investment option of course balance must be well maintained however people must stop being so risk-averse because it is what slows down the economy.

Are you saying that real estate is risk-free? By all means it's not!
I like to give the example of people who invested in Ukraine before the start of the war. Imagine all these developers who were building houses for rent and a month later Russians were squatting in them for free. I know this is an extreme example, but you can never know when the place is going to burn, like those apartments in Hong Kong, or you get a tenant who refuses to pay and has to be evicted.

Real estate is a pretty safe investment, but if you are really risk-averse, you should get a savings account, maybe some ETF shares, some gold or silver... Land can always be seized because the government decides it needs a new road, or has found uranium or something. A great example is archeological digs. If they find some ancient bones on your land you're going to have it taken away from you before you have time to react.

[Miles2006]

In summary Real Estate investment is important to the society, obviously op is right. Real Estate investing is beneficial only to an investor, investors dedicate their time and you can’t doubt the fact they’re actually benefiting. Talking about engineers, builders etc, an investor is not responsible neither the society viewing this is personal associated with engineers and architects meanwhile they can always find other related jobs as well, certainly when one project is completed there’s always a different project.

[demonica]

Rental Property Investment or can be called rentvesting is a type of investment wherein you invest in real estate whether to live on it, rent it out, or build business on it. A lot of people dream of owning lands or rental property but this might actually is what kills the economy. Imagine the type of jobs that real estate generate. There are engineers, architects and construction workers. But once the building gets built, there will be no more jobs from that real estate or there's less.

Actually, even after finishing the construction of a building, there will still be employments. Building engineers, building manager and such to manage the building. Even after the building is constructed, there will still be continuous repairs that need to be done in order to maintain the building. Also, those who were involved in building the building, it doesn't mean that they have no work after the constructions. These people are under a construction company. Once they're done with one client, they'll have another client who wants them to building another project.

Those other businesses you've mentioned, they're in different industry. They are in the "manufacturing" which means they continuously make their products for their customers. While realty is a different sector and you can't really compare them with each other.

[DrBeer]

In summary Real Estate investment is important to the society, obviously op is right. Real Estate investing is beneficial only to an investor, investors dedicate their time and you can’t doubt the fact they’re actually benefiting. Talking about engineers, builders etc, an investor is not responsible neither the society viewing this is personal associated with engineers and architects meanwhile they can always find other related jobs as well, certainly when one project is completed there’s always a different project.

I consider this to be a mistaken opinion, as the entire focus is solely on the investor.
Let me clarify:
If there is demand for investment properties (investors are buying them), then they will be supplied to the market. And the production of this “commodity” means jobs, salaries, and taxes.
 
A secondary benefit for the market is that by renting out residential or non-residential real estate, real estate investors also enable families, for example, to move to another city and rent an apartment in order to start working at a new company, since not many companies offer a “job + housing” package. For example, if you are offered a very good, much more attractive job in another city or country where you do not own property, how will you accept the offer if you cannot rent property? And who can you rent from? The developer of the residential complex? No, of course, from an investor who will buy an apartment there.
The same applies to non-residential real estate—new offices, warehouses, and manufacturing facilities.
Such real estate/investors solve a very significant problem—the consumer's lack of the full amount to purchase such an object for themselves, when there is a high need to obtain this object now, rather than waiting to accumulate the necessary amount.

[Josefjix]

Please, change your perspective about real estate investment and you will see the big picture difference in what you saw before writing this topic, maybe this is what is happening in your country but even as that, you need to shift your perspective and view it from another lens. You are simply short sighted and writing from a place of inexperience and non exposure.

Real estate has so many workers known as agents who search for property, book keepers who documents, lawyers, content creators, marketing expert, and more. These workers simply get paid through a client that pays up for a property which they simply has a percentage cut for real estate workers.

For example, a plot of land can cost two thousand dollars, agents can add more one thousand dollars for agents fee, making everything sums up to three thousand dollars which the client pay to the agent account, where agent pay to the owner of the property account, stuffs like that.

[Oluwa-btc]

I think everything depends on the opportunities available. Sometimes those who choose to keep investing in real estate, as well as those involved in its development, feel that they gain better benefits in that field. When you build housing or apartments to rent out, you will need maintenance. So even if indirectly, it still creates new job opportunities. The cash flow may feel slower compared to other types of investments, but as long as it still generates profit, I think there is nothing wrong with giving it a try.

Reinvesting kills the economy when reinvesting itself becomes extractive, not productive.The economy works better on circulation,not hoarding.Imagine  where an investor keeps buying existing homes instead of building new ones.Every Reinvesting strategy has to work, improve and make productive returns.A developer gets to reinvests profits into building affordable housing,more homes, and jobs created.

[uneng]

There are engineers, architects and construction workers. But once the building gets built, there will be no more jobs from that real estate or there's less.

Nothing is forever in this world, including buildings. There will be always jobs on the industry, because buildings need frequent repair and maintenance, besides refurbishment from times to times. Trends also change every few years, so architects are constantly working to upgrade and rebrand older buildings. There is a lot of work to do on this sector and it never ends.

What I see nowadays is quite the opposite. There are many people willing to hire, but there aren't people willing to work. Too much demand for too low supply (of course, talking about qualified labor force). As result, building ends becoming a very expensive market to venture into, although quite profitable for those engaged on it.

[Jateng]

Reinvesting kills the economy when reinvesting itself becomes extractive, not productive.The economy works better on circulation,not hoarding.Imagine  where an investor keeps buying existing homes instead of building new ones.Every Reinvesting strategy has to work, improve and make productive returns.A developer gets to reinvests profits into building affordable housing,more homes, and jobs created.

Most people if they do not get profit from their investment reinvest to get it again which is a loss. there was a profit from this thing or business it would have been done the first time. It is foolish to reinvest on it. the economy works well when we invest money in something. Accumulating it does not yield much benefit but rather society deteriorates. If we do not use the capital or spend it to get old resources it will not add to the economy. you should invest paisa in things that can help you grow and not waste your money on acquiring old things.

[slapper]

This feels backwards to me.

Rich countries didn't get rich by not investing in real estate, they got rich first and then their populations had surplus that they could park in property. The risk was socialized. The wins were privatized.

And you're comparing real estate with manufacturing like those are the same choice for normal people? They're not. Most people can't fund R&D. They can't start factories. What they can do is purchase a property and rent it out, maybe build some stability.

The jobs argument doesn't hold up either because manufacturing jobs left for cheaper labor markets. That occurred whatever the level of real estate investment. Automation took the rest. Even if everyone quit buying property tomorrow those jobs aren't coming back to expensive labor markets.

What actually happened is we financialized everything. Housing ceased to be a place to live, and it became an asset class. Education became debt. Healthcare became risk for bankruptcy.

[Smartvirus]

Rental Property Investment or can be called rentvesting is a type of investment wherein you invest in real estate whether to live on it, rent it out, or build business on it. A lot of people dream of owning lands or rental property but this might actually is what kills the economy. Imagine the type of jobs that real estate generate. There are engineers, architects and construction workers. But once the building gets built, there will be no more jobs from that real estate or there's less.

I don’t know how you come to terms with these ideas but, they are very shallow in its formation, you tend to look at it from the surface rather than go deep to understanding that there are phases to every aspect of development.

Of course certain projects in its building phases do require a lot of professional hands to get the structures erect and when that is done, the property could be rented out as offices and the money generated from it would be reinvested some place else and enrich the economy.

Even these big brands you’ve mentioned need not operate from a single place, there is always room for expansion and they do expand, own outlets or offices in other places, where they can’t build, they rent or buy and that’s still real estate. Where they would want to relocate from, they could sell off the property or rent and the circle continues.

It’s indeed much more than you’ve imagined it @OP.

[Jateng]

Reinvesting kills the economy when reinvesting itself becomes extractive, not productive.The economy works better on circulation,not hoarding.Imagine  where an investor keeps buying existing homes instead of building new ones.Every Reinvesting strategy has to work, improve and make productive returns.A developer gets to reinvests profits into building affordable housing,more homes, and jobs created.

Most people if they do not get profit from their investment reinvest to get it again which is a loss. If there was a profit from this thing or business it would have been done the first time.It is foolish to reinvest on it. the economy works well when we invest money in something. Accumulating it does not yield much benefit but rather society deteriorates.If we do not use the capital or spend it to get old resources it will not add to the economy. I want to explain that you should invest paisa in things that can help you grow and not waste your money on acquiring old things.

[alastantiger]

Rental Property Investment or can be called rentvesting is a type of investment wherein you invest in real estate whether to live on it, rent it out, or build business on it. A lot of people dream of owning lands or rental property but this might actually is what kills the economy. Imagine the type of jobs that real estate generate. There are engineers, architects and construction workers. But once the building gets built, there will be no more jobs from that real estate or there's less.

Real estate often attracts people because it’s tangible and straightforward, but when too much focus is placed on it as we are doing these days, the economy ends up less dynamic unlike industries that produce goods, innovate, and export liek the companies you mentioned, real estate on the other hand mainly moves existing wealth around and creates limited ongoing employment once a project is completed. That is why a healthy economy needs people to take calculated risks in sectors that generate real value, create jobs, and stimulate innovation. Real estate can still play a role in an investment portfolio, but relying on it exclusively can slow economic progress and limit broader opportunities for growth.