I think 3% is reasonable but you HAVE to keep up with inflation these days.

Problem relying on Z-rent solely is that vacant properties that didn't rent will appear as rented just because the listing was pulled down despite not renting, and by doing that it is inflating the rental rates.

Makes for higher cash flows and good hedge on inflation. 

Now was the rent inflated??

(I have taken it back 3x DILO over 10 years so the bldg owes me nothing.)I assumed ownership after the 'auction' failed to entice any buyers, but the foreclosure amount was sufficiently Inflated with expenses etc above MV.

We recently came to the realization that our cash "reserve" is getting fairly large, and it's being underutilized  in a bank account, where it's only losing value against inflation.  

Inflation hedge and tax advantages essentially.

Maybe I am wrong but...What I think is very important to consider are the returns after adjusting for for both TAX & INFLATION.

Store of wealth: This happens when very wealthy people need a safe inflation hedged asset to store their wealth.

Plug in expected cost of materials and labor projecting inflation rising for that year 4 .