Simple Question about Rent Increases vs. Inflation

[Jason Merchey]

I don't think I know the answer to this question. SOmeone help me out: if you assume that you can raise rents 3% a year on your projection, should you be assuming that a) you will see 1-10% increases in insurance, some possible increase in property tax, and due to inflation, a 2-4% increase in normal years on everything from roofs to HVACs to paint and carpet? Thus, is it not inappropriate to assume that your NOI is going to increase by 3% a year for the next however many years? It would seem to me like using an eyedropper to drip water into your mostly full cup of water at the rate of a drop per second - while there is a pinprick on the bottom of the cup that loses a drip every second.