What makes the rate of return worth owning real estate?

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Didn't phrase the topic title correctly. It should be:
"What rate of return makes owning real estate worth it?"

Assuming that I don't expect appreciation.

What sort of rate of return should I aim for to justify owning property? 

I'm seeing around a 12% return from investing in real estate in Sacramento, but I don't know if it's worth the hassle given that Sacrament is an hour and a half away. 

Part of me just wants to chuck all my money in an index fund.