Do Cap Rates (and ROI) Improve over Time with Inflation?

[Eran Greenburg]

E.g. You buy a $100k house that has cap rate of 10%, so $10k cash flow.

Since you adjust 3% per year for inflation, after 15 years your income is doubled to $20k, yet the asset price is still only $100K, so now you have a cap rate of 20%. In 30 years it doubles again.

Considering alternatives for other investments where the ROI is fixed, this would make real estate seem a lot more lucrative.

What am I doing wrong here?