Net Effective Rent Calculator – Calculate Rental Income Accurately

Net Effective Rent Calculator

Calculate true rental costs after concessions, free months, and tenant improvements

🏢 Commercial & Residential 📈 Per SqFt/Monthly Views 📊 Downloadable Reports

Net Effective Rent

$0
Per Month
$0
Annual

How Concessions Affect Your Rent

Visualization showing gross vs net effective rent

What Is Net Effective Rent?

Net Effective Rent (NER) is the actual average rent paid after accounting for all concessions like free months, tenant improvement allowances, and other incentives. It’s lower than the gross (sticker) rent and provides a truer cost comparison between properties.

NER Formulas

Monthly NER

(Base Rent × (Term – Free Months) – Tenant Allowance) ÷ Term

Annual NER

Monthly NER × 12

Per SqFt NER

Annual NER ÷ Square Footage

Real-World Examples

Scenario: 12-month apartment lease at $2,500/month with 1 free month and $1,000 moving allowance

Calculation: ($2,500 × 11 – $1,000) ÷ 12 = $2,292/month NER

Savings: $208/month (8.3% lower than gross rent)

Frequently Asked Questions

What’s the difference between gross rent and net effective rent?

Gross rent is the stated rental amount before any concessions. Net effective rent accounts for free months, tenant allowances, and other incentives to show the actual average rent paid over the lease term.

How do tenant improvement allowances affect NER?

TI allowances reduce NER because they’re effectively cash contributions from the landlord that offset your rental costs. A $10,000 TI allowance on a 12-month lease reduces your NER by $833/month ($10,000 ÷ 12).

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