Inflation and Appreciation Variable for Long Term Projections

[Joseph M.]

What variables would you use for the long-term projections of your portfolio? I am trying to create a conservative, middle of the road and aggressive calculation of my net worth and net profit.

This article says inflation averages 3% a year long-term and real estate 3.1%.  This website says inflation averages 3.22%. There is a lot of data out there.

What numbers would you use for the projections below? And what data would you use to get those numbers?

Property Value Increase: Conservative -      Middle of the Road -      Aggressive -

Rent Increase: Conservative -        Middle of the Road -         Aggressive -

Tax Increase: Conservative -       Middle of the Road -       Aggressive -

Insurance Increase: Conservative -       Middle of the Road -       Aggressive -

Association Fee Increase: Conservative -       Middle of the Road -       Aggressive -

Maintenance Cost Increase: Conservative -         Middle of the Road -        Aggressive -

[Sam Grooms]

If you're working with a time horizon of 30+ years, that's even more of a reason to use 3%. Stay with historical trends. 

No one can predict the exact rate of inflation/appreciation, so I wouldn't make such impacting decisions based on what I know is going to be a faulty estimate. 

Even in 2014, people were underwriting using 3% for rent expenses. Now, we know rent increased a lot more than 3% in the last 4 years. But guess what? Those same people are still using 3% when underwriting, knowing that in the long term, it'll likely have a way of correcting itself back to 3%. 

Now, I will say this. If you're buying property in a certain area, obviously don't use nationwide appreciation rates. If I'm buying an apartment complex in Michigan that I plan to hold for 10+ years, I'm probably using less than 3%, with the decline in population and job growth.