It is a common mis-conception that landlords are wealthy. We're just having a grand old time with all the money you pay in rent. So lets see where that money actually goes. Yes you pay the mortgage, fire insurance, liability insurance, city real estate tax, school district tax, county taxes. Then there are repairs to the property. If at the end of the year a landlord actually makes a profit it's taxed as income. In return the landlord provides a roof over your head.