This isn’t true. Plenty of landlords don’t cover their monthly expenses for providing the housing.
Either way, if I rent out my house and pull in $5k/mo but spend $2k/mo on principal, $2k/mo on interest, and $1.5k/mo on miscellaneous costs, that $500 "loss" translates into me paying $500 for $2k in principal value, all while gaining the benefits of solid inflation-indexed real estate growth AND assistance up the amortization schedule. So even cash-flow negative rentals are usually pretty long-run lucrative.
Go and ask all the landlords in Toronto how the finances are working out.
Tons of landlords were cash flow negative against fully loaded costs. Then the market flipped and house prices dropped 30%.
Now they’re shelling out $2000 of their own cash per month, gaining $500 in equity, while they pay down a $700,000 mortgage on a home worth $500,000.
Just because landlords don't clear their monthly expenses does not mean that the tenant's rent is not going to cover (a portion of) property taxes.
It like me buying a laptop and saying I pay for the electricity in the factory in China.
While it’s true the money helps pay for it, it’s not a pss through expense.
I assume that rising property values make the endeavor worthwhile?
tone: I am not being snarky here. Genuine question.