How to read this result
In the default example, total effective lease rent is $32,500.00. Results describe this input scenario; they are not a recommendation.
Change one assumption at a time to see how it affects the scenario. Compare periods and cost definitions consistently. Negative results show a modeled shortfall; an unavailable ratio needs a valid denominator.
Formula and methodology
Multiply face monthly rent by paid months, then subtract fixed concessions. Divide the remaining lease rent by all lease months for net effective monthly rent. The effective discount compares this total with full face rent.
Enter percentages as whole numbers: 5 means 5%. When used as a factor, the calculation divides a percentage by 100. Percentage outputs multiply the final ratio by 100. Calculations retain precision internally; displayed amounts and rates are rounded to two decimals.
Variables and input definitions
- Gross monthly rent (USD/month)
- Face rent before concessions. Minimum: 0.
- Lease term (months)
- Lease length. Minimum: 1.
- Free-rent months (months)
- Free months/concession period. Minimum: 0.
- Fixed concessions (USD)
- Additional one-time concessions. Minimum: 0.
Worked example
This example uses the exact prefilled inputs above. Reset defaults to restore this scenario after making changes.
| Item | Default scenario |
|---|---|
| Gross monthly rent | $3,000.00 |
| Lease term | 12 |
| Free-rent months | 1 |
| Fixed concessions | $500.00 |
| Item | Default scenario |
|---|---|
| Total effective lease rent | $32,500.00 |
| Net effective monthly rent | $2,708.33 |
| Effective discount | 9.72% |
Assumptions and limitations
Does not determine lease legality, fees outside modeled concessions or renewal economics.
Results describe this input scenario; they are not a recommendation.
The tool uses values you supply. It does not retrieve market prices, verify leases or inspect a property. Results exclude items outside the listed inputs. Review local requirements and the relevant contract when a payment, fee or allocation depends on them.
Common mistakes
Do not subtract a concession already represented by free months again as a fixed dollar allowance. Net effective rent is not necessarily the amount billed every month.
Sources and method references
These references provide context for the method and terminology. They do not endorse this tool or validate your property assumptions.
- GovInfo / HUD — 24 CFR §880.608 — Security deposits (federal housing program example)Program-specific example referencing state/local deposit requirements; not a national interest-rate rule.
Frequently asked questions
Does net effective rent change the monthly invoice?
Not necessarily. A lease may bill face rent in paid months and zero during a free period. The result averages the economic cost across the full lease.
Can free months exceed the lease term?
No. Free months and fixed concessions are validated so that they do not exceed the modeled contract rent.