The expense inflation rate is a projection of how much your property’s operating costs are likely to increase over time—usually expressed as a percentage per year. This includes things like property taxes, insurance premiums, and maintenance costs. It’s a useful assumption in long-term investment models because it helps forecast future cash flow and net operating income. At Meridian, we include a conservative inflation rate in our pro forma projections so you can plan for rising costs and protect your ROI. Ignoring inflation may lead to overly optimistic returns and missed financial targets.
