In my experience landlords tend to buy property and then use renters to pay for their mortgage. And then they add more on top of that so not only is their mortgage being paid but they're earning money too. I know some people for example who are buying a 2 bedroom apartment (they only need a 1 bed) and are renting the second room at a price high enough to cover their mortgage. So basically they're not paying a penny for their accommodation.
Not least because landlords incur overheads over and above those an owner-occupier does.
There is a large 'buy-to-let' industry in the UK, whereby millions have taken out mortgages to buy properties for the sole purpose of renting them out.
The rental income pays the mortgage, and usually provides some profit on top, all while the value of the property itself continues to appreciate.
Basically if buying a house and renting it out immediately turns a profit, that's a renter-saturated market, and it seems best to be on the non-saturated side of the market
But isn't there also an economy of scales argument to be made. If you own dozens of buildings and hundreds of flats, you should be able to keep your pr. flat cost lower than someone who just bought one flat.
I'm talking about things like:
* Admin costs (contracting, etc.)
* New tenant costs (marketing, agency fees, reference checks, credit checks, inventory, etc.)
* Landlords' insurance
* Extra safety checks (e.g. annual gas safety checks)
* Cost of downtime between tenants
* Cost of rectifying wear and tear (cannot recover from tenants)
There's also a difference in terms of maintenance. If I'm an owner-occupier and something breaks, I can live with it for a while, shop around, get a few quotes, and get it fixed at my leisure.
As a landlord, if something goes wrong with one of my properties I have an obligation to repair it as soon as reasonably possible.
Then every now and then you get a tenant who completely trashes a property, causing damage far in excess of any deposit, and which you're unlikely to ever recover.