He Projected 6% Rent Growth. He Got 3%. His Investors Got Excuses Rent growth is not one number. If you don't separate where it comes from, you'll misprice deals and overestimate Year 1 cash flow. Two deals with "6% rent growth" can be wildly different businesses. There are three levers hiding in every deal. There are more, but let’s not turn this into an essay.🤔 1) Market Rent Growth This is the tide. What the city does without you. Market rents rise 6% this year. You did nothing. You just showed up. 2) Realized Rent Growth (after Loss to Old Lease) This is where underwriting lies to itself. Leases don't reset all at once. They roll over time. A lease that renews on January 1? You get 12 months at the new rate. A lease that renews on June 1? You get 6 months. A lease that renews on December 1? You get 1 month. With evenly spread expirations, you average 6 months of the new rent per unit that reprices. 6% market growth becomes roughly 3% realized growth in Year 1. Same market. Very different NOI. If you ignore Loss to Old Lease, your projections are fiction. 3) Deal-Driven Rent Growth This is the only part that separates good deals from average ones. Actual rent increases beyond the market. This is rent growth you manufacture: * Mark-to-market capture * Value-add unit upgrades to match or beat comps * Amenity-based pricing tiers (renovated units, pool view, top floor) * Rolling back hidden concessions * Fixing pricing leakage between floor plans * Tightening renewal spreads * Utility billing recovery (RUBS) - A form of rental increases * Cleaning up reputation so prospects stop negotiating None of these requires more heads in beds. They change what each lease is worth. When you underwrite, separate Market Rent Growth, Loss to Old Lease, and Deal-Driven Rent Growth. Market rent growth is often just luck. Loss to Old Lease is calendar math. Deal-Driven growth is the only part that's skill. Many investors use one number for all three, then wonder why the guy across the street is printing money while they're fighting for 4% returns. Separate what you control from what you don't. Or keep blaming the market.