The reason I phrase it this way is because I hear a lot of people talking about passive income but no one talks about actually owning the property, which I would think would be part of the calculation.

What is there to talk about? What calculation?

Be more specific. :)

If you mean calculation for FIRE, well cash flow is the important part. You can't pay bills off equity, unless you tap it somehow, or sell.

If you're talking about appreciation adding to your net worth, well, that's great, but unless it comes with increased rents, or you sell, again, it doesn't matter.

In general though, it's not mentioned because it doesn't matter, as it's mostly cancelled out due to inflation. Historically, house prices and rents rise (roughly) with inflation.

So you may get $X in cash flow, and it's worth $Y. X and Y rise over time due to inflation, but stay flat in real dollars. So in 20 years, you're still getting $X in rent in real dollars, and it's still worth $Y in value (even if both of those numbers have doubled in nominal dollars).

So most of us count on that rise to cancel out inflation, and the house value itself doesn't matter--it just sits there, preserving its value, and providing the cash flow.

You can't count the value of the house itself in terms of a spendable portfolio AND count the cash flow towards your spending, that would double count it and get the numbers wrong.

Does that make sense?

If you meant some other calculation...please clarify what you're asking.