We have lived in an inflationary environment for years, with its supposed peak in 2022, and inflation has impacted not just consumers, but property owners across the board.
In our proprietary analysis, we dove deep into 2022 inflation data and applied inflation rates to property operating expenses. We found that older assets were hit harder by inflation due to rising construction and energy costs, while newer assets were less impacted by the rates of inflation across categories.
Ultimately, owners have many opportunities to overcome inflation at an asset level including:
Each strategy presents varying pros and cons but ultimately owners needed to +7% to +10% rent growth to overcome +11% to +14% operating expense growth, and this is just to see flat Net Operating Income.
This analysis is most insightful at the asset level, so we’d enjoy the opportunity to dig into your specific assets and apply this portfolio inflation audit to your personal situation.
Interested in hearing more about our portfolio inflation audit?
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