Lets unwrap this.

First of all you claim that the investment in these funds is not the best option, implying that this reflects on being alandlord directly. Instead you need to consider the costs of running the fund, which is even higher than for actively managed stock funds as you get both active management and physicalassets that are more complex to manage than virtual assets like stocks.

Then you claim that it is not a source of money from nothing. But at the core it is. Why is that? Because space is limited and cannot grow. Companies can grow, ressources can be extracted, work can be put towards something. But the fundamental source of income of a landlord is his control of a limited space ressource. If you claim "but there is a house on that space" then you should compare the rental and also buying prices of the same quality houses depending on location. It is an old wisdomof proerty companies. The first three criteria are location, location and location.

Finally you argue that it is usually not the best asset to invest in. This may be true for many people, but it is irrelevant to the fact that landlords extract money from scarcity and there is no productivity from there part that justifies this extraction, nor does it benefit the overall economy.