# Net Effective Rent Formula

## Purpose

Spread a rent concession across a lease to create a comparison rent.

## Formula

grossLeaseRent = monthlyRent * leaseLengthMonths

concessionValue = monthlyRent * freeMonths

netLeaseRent = grossLeaseRent - concessionValue

netEffectiveRent = netLeaseRent / leaseLengthMonths

actualMonthlyPaymentBeforeConcessionSpread = monthlyRent + monthlyAddOns

## Example calculation

$2,400 monthly rent, 12-month lease, 1 month free: grossLeaseRent = 28800, concessionValue = 2400, netLeaseRent = 26400, netEffectiveRent = 2200.

## Edge cases

The concession may be applied upfront, monthly, or at the end. Net effective rent may not be the amount due each month.

## Rounding rules

Round for display after calculation.

## Limitations

Verify concession language in the lease.

## Related working tool URL

/tools/apartment-offer-comparison/