I live in Munich (the city with the highest rents in Germany) and there are like 4 or 5 rooms within walking distance (Maxvorstadt/Schwabing West area). I wonde

I live in Munich (the city with the highest rents in Germany) and there are like 4 or 5 rooms within walking distance (Maxvorstadt/Schwabing West area). I wonder how they make a profit if there is so much competition close by.