Its not insured if you leave it in the bank at absurdly low interest rates that lose to inflation, stocks have volatility (though certainly you would be invested in them to some extent) and many fewer tax advantages.

It doesn’t take into consideration any discounts or refunds given to guests, owner blocked dates for maintenance etc. so it does in general inflate the numbers over what the actual annual revenue will likely be.

I know many contractors will underbid a project in order to secure the job only to inflate the cost before completion. 

Money is melting away in bank accounts with interest rates lower than inflation = purchasing power going bye bye.

Michael,A Hotel has much more unstable income through REVPAR versus a multifamily building.The smaller properties will be valued under 5 units more with the comparable sales approach versus the multifamily properties using the income approach.With increasing rents each year,decreasing costs,and cap rate compression you can get plenty of appreciation.You have to remember that appreciation is trying to keep up with inflation each year.More options and finance structures in commercial loans versus residential.Yes you can own multiple small little buildings in different states to diversify but that can be risky and a headache as well.Then you have to find different management companies and expect them all to do a good job without issues versus one with a bigger complex.

. - high interest rate - most believe these higher rates are temporary and will come back down after inflation is under control.

appreciation rates here would slide but would remain well above inflation.4.

@Rob Saxelby because of fraud concerns, you should also ask the seller to personally sign Reps & Warrants to be liable for any potential fraud.There's a big case going on about this in Michigan with some NY investors, where income was inflated via falsified rent ledgers and expenses were lowered via falsified P&L's.

We are still raising rents to catch up to the large market increases from 2020-2022.From an inflation standpoint, the information above is a good thing as market rents and owners' equivalent rent are a huge part of the inflation calculation (and also one of the reasons the fed has pivoted positions as they understand the lag impact of stabilizing/declining rents in the calculation).

Interest rates will definitely affect cap rates, but so will inflation.