Enter the base rent, current index, and base index into the calculator to determine the adjusted rent. This calculator helps in understanding how much the rent should be adjusted based on changes in the rental index.
Rental Index Formula
The following formula is used to calculate the adjusted rent based on the rental index.
Adjusted Rent = Base Rent * (Current Index / Base Index)
Variables:
- Adjusted Rent is the rent amount after adjustment based on the index change.
- Base Rent is the initial rent amount before any index adjustments.
- Current Index is the rental index at the time of adjustment.
- Base Index is the rental index at the time the base rent was set.
To calculate the adjusted rent, multiply the base rent by the ratio of the current index to the base index.
What is a Rental Index?
A rental index is a measure used to track changes in rental rates over time. It is often used in lease agreements to adjust rent periodically to reflect changes in the market. The index is typically based on a set of data that represents the average rent prices in a specific area or for a particular type of property.
How to Calculate Adjusted Rent?
The following steps outline how to calculate the adjusted rent using the rental index.
- First, determine the base rent which is the initial rent amount.
- Next, determine the current index which is the rental index at the time of adjustment.
- Next, determine the base index which is the rental index at the time the base rent was set.
- Use the formula from above to calculate the adjusted 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.
Base Rent = $1,200
Current Index = 110
Base Index = 100