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Updated about 7 years ago, 11/18/2017
Question on Cashflow Calculating Accounting for Boom Bust
Hey everyone,
I've had a question for a while. I've read a few books now that all talk about cashflow analysis for a property, but there's one thing I am not sure how to handle. One book I read mentioned how along with boom and bust of house prices, rents will also fluctuate with the market. I've read the rent fluctuations are not as severe though. My question is, how do people account for potential rent decreases with the market when analyzing a deal for cashflow? Are there measures for safeguarding? And is there a way to have an idea how much the rent will decrease if the market goes down for a while?
Thanks :)