Which of the following should be included in sensibility check questions?

Including the alignment of Average Daily Rate (ADR) growth with inflation as a sensibility check question is particularly important in real estate finance. This is because understanding how ADR growth measures up against inflation can provide insights into the overall health of the rental market and its potential profitability. If ADR growth is lagging behind inflation, it indicates that the real income generated from rent may be diminishing, which can raise red flags regarding potential returns on investment.

This relationship is crucial when evaluating whether a specific property or investment strategy remains viable under current economic conditions. It helps investors gauge whether prices are set appropriately and if the rental market is keeping pace with the broader economic environment. By asking this question, investors can assess whether assumptions about revenue growth are grounded in realistic expectations that reflect inflationary pressures.

In contrast, while aspects like market share analysis, long-term investment goals, and property management efficiency also play vital roles in real estate assessments, they do not directly relate to the immediate financial sustainability of properties regarding revenue generation and inflation impacts. Market share analysis focuses on competitive positioning rather than financial viability, long-term investment goals pertain to strategic directions rather than current market conditions, and property management efficiency primarily concerns operational aspects. Understanding the interplay between ADR growth and inflation provides a direct metric for