In reality, you do make money with rental property every year. If what you charge for rent covers mortgage, insurance, property taxes and those few repairs and maintenance expenses incurred during the year, anything left over is profit that goes in your wallet.
But when it comes to taxes, it's that depreciation that you are required to take each year by law, that basically "cancels out" the taxability of most (if not all) of what goes in your wallet. So while you may in fact make money, from the income tax perspective, it "appears" on paper that you are losing money.
