Projected income growth and rent inflation
Hello everyone,
1. According to this statistics the average rent inflation rate from 2010 to 2018 is 3.11% per year. During the recession the rate went to:
2.28% in 2009
0.23% in 2010
1.71% in 2011
2.65% in 2012
2.83% in 2013
And it finally came back to average rate in 2014 (3.15%)
So, we have 5 years with rents growth being below average rate, so we would have a loss in comparison with a long-run where we get 3.11%. Average rate for those 5 year was 1.87%. Does it mean that we are pretty safe on a multi-family investment from the point of view of income? It seems if the average rent grow by 40% less than average but it is still a positive number, our NOI is fine to protect us from a lot of issues. Is it the vacancy factor which matters the most that I'm missing?