Enter the total annual ground rent into the calculator to determine the ground rent purchase price.

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## Ground Rent Purchase Formula

The following equation is used to calculate the Ground Rent Purchase.

GRP = AGR / P

- Where GRP is the ground rent purchase price ($)
- AGR is the annual rent ($)
- P is the percentage factor. This is typically 6% (.06)

To calculate the ground rent purchase, divide the annual rent by 6 percent.

## What is a Ground Rent Purchase?

Definition:

A ground rent is an agreement in which someone owns the building but not the land that building is located on.

## How to Calculate Ground Rent Purchase?

Example Problem:

The following example outlines the steps and information needed to calculate Ground Rent Purchase.

First, determine the annual ground rent. In this example, the annual ground rent is $2000.00.

Next, the final and last step is to use the formula above:

GRP = AGR / %

GRP = 2000 / .06

GRP = $33,333.33