eli5: If some California properties are cheaper to rent than own, how are these properties at all profitable for owners?

Question

Just learned that when accounting for property tax and maintenance expenses for some properties in HCOL areas (namely CA), the age old truth that it is “cheaper to own than rent” is not true in this example.

But if renting is cheaper, how is the owner not operating at a loss and not closing shop / raising rent?

In: 5

Answer 1

Appreciation of land value is also effectively an income source for the property owner in the long run.