Net Effective Rent Calculator

Formula

To calculate the net effective rent:

\[ \text{NER} = (\text{R} \times \text{L}) - (\text{R} \times \text{RF}) - (\text{O} \times \text{L}) \]

Where:

$\text{NER}$ is the Net Effective Rent
$\text{R}$ is the monthly rent
$\text{L}$ is the length of the lease in months
$\text{RF}$ is the total number of rent-free months
$\text{O}$ is the operating costs per month

What is Net Effective Rent?

Net effective rent is a measure of the total rent of a property after rent-free months and operating costs have been taken into account. It provides a more accurate representation of the actual cost of renting a property over the lease period.

Example Calculation 1

Let's assume the following values:

Monthly Rent ($\text{R}$) = $2000
Length of Lease ($\text{L}$) = 12 months
Rent-Free Months ($\text{RF}$) = 1 month
Operating Costs ($\text{O}$) = $100

Using the formula:

\[ \text{NER} = (2000 \times 12) - (2000 \times 1) - (100 \times 12) = 24000 - 2000 - 1200 = 20800 \]

The Net Effective Rent is $20,800.

Example Calculation 2

Let's assume the following values:

Monthly Rent ($\text{R}$) = $1500
Length of Lease ($\text{L}$) = 24 months
Rent-Free Months ($\text{RF}$) = 2 months
Operating Costs ($\text{O}$) = $150

Using the formula:

\[ \text{NER} = (1500 \times 24) - (1500 \times 2) - (150 \times 24) = 36000 - 3000 - 3600 = 29400 \]

The Net Effective Rent is $29,400.