Expense Growth Sensitivity Calculator

Insurance, taxes, payroll, and utilities all grow year over year. Mis-assumptions on expense growth crush NOI. This calculator stress-tests opex growth so you see the risk.

Year-1 rent

Year-1 opex

Rent growth

Low expense growth

Base expense growth

High expense growth

Hold years

Exit cap rate

Base exit value

$11,465,411

Low-opex exit value

$12,393,122

High-opex exit value

$9,896,003

Base exit NOI

$687,925

High-case NOI erosion vs base

$94,165

How the math works

Expense growth ≠ CPI. Certain line items (insurance, real estate tax, utilities) regularly exceed CPI. Stress at 2x historical CPI to get realistic bear case.

Every $1 of expense growth fully drops NOI. At a 6% exit cap, that's $16.67 of exit value destruction. Expense stress often does more damage than rent stress.

How to Use

Enter year-1 rent and opex.
Enter rent growth and three expense-growth scenarios.
Enter hold years and exit cap.
Compare exit values.

Frequently Asked Questions

What drives expense growth?

Insurance (6-15% annually in distress markets), property tax (reassessment cliffs), payroll (4-6%), utilities (3-6%), maintenance (3-5%). Blended CPI+1-2% is typical for mixed portfolios.

Why stress separately from rent?

Rents and expenses don't always move together. In weak demand markets, rents flatten but insurance and tax can still spike — hollowing out NOI. This is how deals silently break.

What about insurance shock?

Florida, Texas, coastal California, and wildfire zones saw 30-50% insurance jumps 2022-2024. If your asset is in those geos, stress at 10%+ annual growth explicitly.