Just a thought experiment: If home ownership was rare, almost everyone would be renting. The management company in addition to having to pay the bank loan would also have to make a profit.

To me that sounds tantamount to another tax on living. Anecdotally, owning in LA is cheaper than renting a comparably nice place. And that's irrespective of tax breaks.

The management company can probably manage and maintain a large number of properties more cheaply per-property than a homeowner can maintain a single property. So even if the management company is turning a profit, that doesn't necessarily mean it's a bad deal for the homeowner. Your argument is basically the same as "no one should ever hire a plumber because the plumber is turning a profit which makes it a bad deal."