Enter the lease term, monthly rent, # of rent-free months, and operating costs per month into the net effective rent calculator. The calculator will display the net effective rent per month and year.

## Net Effective Rent Formula

The following formula can be used to calculate the net effect rent of a rental property.

NER = R * L – R*RF – O*L

- Where NER is net effective rent
- R is the monthly rent
- L is the length of the lease in months
- RF is the total number of rent free months
- O is the operating costs per month

How to calculate net effective rent

**Determine the monthly rent and length of the lease**This is the flat monthly rate tenants pay for the use of the space and the number of months.

**Determine any free months**Many leases included 1 free month without rent to be used at any point. This is to help with unexpected job loss ect.

**Determine the operating costs.**Calculate the monthly cost to operate the unit.

**Calculate the net effective rent**

## FAQ

**What is net effective rent?**

Net effective rent is a term used in real estate to describe the actual rent received by a landlord after all expenses are accounted for.

**Is net effective rent more or less than normal rent.**

Net effective rent should be 10-15% less than the normal rent rate on average.