The landlord’s financing costs could be a fraction of yours. Suppose a landlord bought a unit identical to the one you’re looking at, in the same building, in 2012. I live in Manhattan, where the housing market is up 80% since 2012 (source: mildly sketchy website article I have since misplaced). Average interest rates on a 30-year fixed mortgage are also up from 3.65% (first Google result) to 6.6% (Bankrate.com). Assuming a down payment of equal percentage for both the landlord in 2012 and new prospective buyer in 2022 (which would be larger in absolute terms for the new buyer), this translates to a mortgage payment that is 2.5x larger for the new buyer vs. the landlord who bought in 2012. So the rent for an equivalent unit could be a lot smaller than a new mortgage while still delivering a profit to the landlord because the landlord’s older mortgage is much smaller.