Rising Costs & Impacts On NOI

[Matthew Farmer]

As I forecast outer year NOI for a property evaluation, I'm forecasting rising property taxes, but is the ability to pass that increase cost along to rent easy? Or is it something like property capex where it comes due at point or another but you may just get burned alive one year?

I'd assume that NOI declines in years 2,3,4,5 until someone can really pass along rent hikes to the consumer? AND at some point, it's a wass (just like capex). Or are current property owners able to maintain their NOI margin fairly consistently year after year based on the 1st year analysis?

Maybe my biggest fear (1st time investor) is that I'm unable to pass along rising costs through rent and my 1st year cash on cash return isn't representative of my cash on cash return in year 5. For example. cash on cash return in year 1 of 10% but by year 5 it's 7% because I can't pass rising costs along to the renter?