Property investing unethical?

I was scrolling through my feed and saw a sponsored advertisement for a certain property investor and his 30+ property portfolio being interviewed on TV. I looked at the comments and the majority of people were very upset / angry at this person for talking about their success in property. The general consensus was property investors are the reason rents, mortgages and living costs are so expensive.

This has got me thinking now... how ethical is property investing? I understand that among other factors, we have a critical housing supply shortages and prices/rents go up based on supply and demand, but what are our thoughts on the ethics of property investing?

What are the positives of property investment to Australia, and what are the ethical concerns we should consider?

 

The things about the 30+ property portfolio investors on TV.
They all buy in the most affordable suburbs seeking the highest yield possible. Chasing the positive cash flow properties.
Which is exactly the same market as the FHB and lower social economic areas.
Is it ethically to squeeze the most dollars from the most disadvantage people in the society?
That is for your own moral compass to answer.

Personally - I stay away from that as I know where my moral compass point.

 

Good point, I guess the strategy and selection of where these properties are will have various ethical impacts. What about property investment as a vehicle, irrespective of where these properties are?

 

I wish more people felt as you do and purchased only in higher price point properties, pushing up my portfolio even more

 

Fantastic vehicle to grow a bit of wealth to look after your family, provide housing for tenants (gov incapable) and be much less of a drain on gov resources come retirement.

 

Moving up the ladder should be the aim for property investing.
I can understand you have to start investing somewhere.. from the bottom, then moving gradually upwards is quiet a natural progression IMO.

What do I know??? I don't have 30+ properties.

 

Well said - I think a lot of the people who fall into the mindset of hating property investors don't quite understand the supply side of the equation. If everybody wanted to own their own home and that was it, not sure who would be building, splitting, subdividing and repurposing homes and creating more supply of dwellings.

The government hasn't done a fantastic job in addressing the supply issues we are facing, so the free market has to make up for some of the shortfalls

 

Imho I think each investor has different goals. Some want to 'conquer the world' and others are happy to buy 1 or 2 to help with retirement. Just depends on the individual.

Re ethics, there is no issue for me re property investing being unethical. There is a need and we supply the need. Sometimes, individuals can be unethical. Thats a different story.

 

If you think it's unethical, don't do it. Or do it 'more' ethically. Charge lower than market rent. Rent to people who would usually find it harder to find rentals.

But even if you do that, there'll always be people who hate you.

 

Really? I'm one of those who has bought a lot of lower priced housing in areas with high yield and I've NEVER paid more than any FHO would pay. Most of mine have been bought via auction, with me as the only bidder. I fix run down houses that the Housing Department has left vacant, often for well over 12 months, and then place tenants inside, and give them a home.

The fact is that many of the tenants in these areas do not want to buy homes, or do not have the capacity to do so. Even if the homes were half price they still would not buy them.....but they are often the ones to complain that they should be able to buy a house.

If I didn't buy them, and instead FHO's bought, where would those needing to rent live?

 

The other thing not explicitly stated here is, we (property investors) SHOULD be compensated for supplying the needs for others, be it for those who don't want a mortgage in lower end areas, those who want higher end homes and we build them and for those who just want to live in a nice suburb without a mortgage and happy to pay rent. We are also setting ourselves up to be less or in some cases totally non reliant on government pension.

We as investors often take on many risks to meet the demand needs of different segments of the market. We absolutely should be compensated well. By hopefully market growth and rental increase over time.

 

BTW, I know someone who commented on that same article.

Single woman, who lives at home with her (now) 80+yr old mother, and her teenage son in a 2 bedroom unit in the 'Shire'. I have a checkered past with this person, who I've known for about 40 years now. I don't offer help anymore.

Mother owns the unit, and she's now just waiting until it will be hers. Over the years she has often complained that she can't afford to buy a house and how unfair this is. Now, lets not get the facts in the way of a good story here.

She's a qualified teacher, who refuses to work full time, instead teaches gymnastics part-time.

Back, oh, I don't know how many years ago, I told her to buy something near to where I live. It was very affordable at that time, even with her wages, but she refused because 'I could never live there'. I told her that she didn't even need to live there, and she could rent it out, so that she had a solid asset. I was willing to help and do the negotiations for her.

Fast forward to not that long ago, and she desperately wanted something with three bedrooms for them, but still couldn't afford it, and she wasn't going to sell the mothers' unit. I said that she should rent something with three bedrooms, and in turn they could lease their unit. I showed her the price difference, which wasn't huge, but the response was "I'm not going to pay off someone else's mortgage.

So, now she shares a bedroom with her aging mother.

 

I don't think any bank would lend to my centerlink tenants .

 

And yet, the government still tries to sabotage us at every step of the way instead of supplying the facts to those who simply don't understand. All they see is negative gearing.....rich landlords....etc.

 

Blatant lies!!!

Many IPs are interest only, so they're not paying a mortgage just the costs for living there.

 

I knew this topic would whine up some poster.
I am just playing the devil advocate. Bad cop : Good cop.

 

All of us here know this.....but the general public don't.