What are Untrended Rents?
Untrended rents are projected rents that are not based on market-driven rent increases. In contrast to trended rents, untrended rents assume no growth in annual rents. While it's true that rents are growing in most areas in the United States, using untrended rents in projections is a safer and more
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Untrended rents are projected rents that are not based on market-driven rent increases. In contrast to trended rents, untrended rents assume no growth in annual rents. While it's true that rents are growing in most areas in the United States, using untrended rents in projections is a safer and more conservative way to calculate the future financial position of a multifamily property investment.
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Related Questions
What is an untrended rent?
Untrended rents are projected rents that are not based on market-driven rent increases. In contrast to trended rents, untrended rents assume no growth in annual rents. While it's true that rents are growing in most areas in the United States, using untrended rents in projections is a safer and more conservative way to calculate the future financial position of a multifamily property investment.
SourceHow does untrended rent affect commercial real estate?
Untrended rent is a more conservative approach to projecting rental income for a multifamily property investment. It assumes no growth in annual rents, which can be a safer bet in the event of sudden changes to the economy. However, sustained rental decreases at the market level could still result in an inaccurate measure even with this more cautious approach. Source and Source.
What are the benefits of untrended rent?
The main benefit of untrended rent is that it is a more conservative approach to projecting rental income. It assumes no growth in annual rents, which is a safer bet in the event of sudden changes to the economy. This approach is also useful in the HUD 223(f) Loan Program, as it allows for a more accurate calculation of the future financial position of a multifamily property investment.
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What are the drawbacks of untrended rent?
The main drawback of untrended rent is that it does not take into account projected rent growth of the market as a whole, which could lead to an inaccurate measure of rental income. Additionally, sustained rental decreases at the market level could still result in an inaccurate measure even with this more cautious approach. (Source, Source)
How can I calculate untrended rent?
Untrended rents are projected rents that are not based on market-driven rent increases. To calculate untrended rent, you need to use the current rental rate of the property and not factor in any projected rent increases. This approach is a more conservative way to calculate the future financial position of a multifamily property investment.
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