Free Rent Calculator
Calculate effective rent after free rent periods. Compare lease options with accurate net effective rent calculations.
How it works
Effective rent = ((Lease Term - Free Months) × Monthly Rent) ÷ Lease Term. This calculates the true average monthly cost after accounting for free rent periods.
Example
12-month lease at $2,000/month with 2 free months: ((12 - 2) × $2,000) ÷ 12 = $1,667/month effective rent.
FAQ
What is effective rent?
Effective rent is the average monthly rent over the lease term after accounting for free rent periods and other concessions. It provides a true comparison between different lease offers.
How do free rent months work?
Free rent months are periods where the tenant pays no rent, typically offered as move-in incentives. These months are spread across the lease term to calculate the true average monthly cost.
When are free rent months typically offered?
Free rent is commonly offered at lease signing (first few months) as a move-in incentive, or distributed throughout the lease term as a way to lower effective rent.
How does free rent affect lease comparison?
Free rent lowers the effective monthly rent, making higher face rents with free months potentially better deals than lower face rents without concessions.
Is effective rent the same as average rent?
Yes, effective rent is essentially the average rent paid over the entire lease term, accounting for periods of no payment during free rent months.