Enter the market rent ($/month) and the actual rent ($/month) into the Calculator. The calculator will evaluate the Loss of Rent.
Loss Of Rent Formula
LOR = MR - AR
Variables:
- LOR is the Loss Of Rent ($/month)
- MR is the market rent ($/month)
- AR is the actual rent ($/month)
To calculate Loss of Rent, subtract the actual rent charged by the market rent for the unit.
How to Calculate Loss of Rent?
The following steps outline how to calculate the Loss of Rent.
- First, determine the market rent ($/month).
- Next, determine the actual rent ($/month).
- Next, gather the formula from above = LOR = MR – AR.
- Finally, calculate the Loss of Rent.
- After inserting the variables and calculating the result, check your answer with the calculator above.
Example Problem :
Use the following variables as an example problem to test your knowledge.
market rent ($/month) = 3000
actual rent ($/month) = 2000
FAQs
What factors can influence the market rent of a property?
Several factors can influence the market rent of a property, including its location, size, condition, amenities offered, and the current demand for rental properties in the area.
How often should market rent be reassessed for a property?
Market rent should be reassessed at least once a year or whenever the property is up for lease renewal. It’s also wise to reassess market rent if there have been significant changes in the local rental market or if the property has undergone major renovations or upgrades.
Can the loss of rent be negative, and what does it imply?
Yes, the loss of rent can be negative. This happens when the actual rent exceeds the market rent. A negative loss of rent implies that the property is generating more income than the average market rate, which could indicate that the property is undervalued or in high demand.
What are some strategies to minimize the loss of rent?
To minimize the loss of rent, landlords can ensure their properties are well-maintained and competitively priced according to market standards. Offering incentives, improving property amenities, and conducting thorough market research can also help attract tenants and reduce vacancies.
