If a building is built to be rented out, does the builder typically rent out the place? No, it will be someone who buys the building, typically with large amounts of borrowed money, who will then rent out the place. Builders build (often also with borrowed money) because they can then sell the building to someone who can buy. This is all part of the economy.

And you're certainly misusing the term "systemic risk" here - a small-time landlord borrowing money to buy a rental does not in any sense contribute to any kind of systemic risk. They are taking on personal risk in the hope of generating a return on their investment.