Take the money from small projects like single family rentals and use them to fund larger projects by using leverage. That’s the only way cities and apartment buildings, or commercial spaces like shopping malls are able to be funded and built. Same as you taking money from a small thing (e.g working and saving a down payment) and using leverage to finance a new car. A profit is needed in these cases as it maintains incentive for maintaining homes and investing in the creation and rehabilitation of additional living spaces.

The primary issue right now from my best knowledge is that there simply isn’t enough supply of homes and living spaces available, leading to increased demand, and willingness to pay a higher price. Investors partially solve this issue by funding new developments and high density dwellings like apartment complexes. If you ever take an economics class, you will learn the simple truth that the value of something is only up to what people are willing to pay. If demand is lowered, people, as a whole are less likely to pay for the price being asked, and the seller will need to continue lowering, and lowering their price to find what the buyer will willingly pay. This is part of the reason that we have the consequence of high interest rates at the moment as well.

If rentals were useless they would not exist in a given market, but they serve a need.