Two figures in, a clear answer out. The net effective rent calculator uses operating costs, base rent, lease term, property area, no. of rent-free months and tenant cash allowance to produce net effective rate (monthly), net effective rate (annual) and tenant cash allowance, applying the standard relationship for this problem in the order the calculation actually needs it.
What Is the Net Effective Rent Calculator?
The net effective rent calculator takes operating costs, base rent, lease term, property area, no. of rent-free months and tenant cash allowance and turns them into net effective rate (monthly), net effective rate (annual) and tenant cash allowance.
It is the kind of calculation you would otherwise do on the back of an envelope: mechanical, repeatable and easy to get subtly wrong without noticing.
How the Net Effective Rent Figure Is Built
Each result is calculated from the ones before it, so the working is fully visible. That matters when the answer is going to be quoted to somebody else and you need to be able to explain where it came from.
The figures are exactly as good as the assumptions underneath them. Check the rates, the periods and the tax treatment before you rely on the result.
Reading the Result Sensibly
A small change in an input can move the result by much more than you would expect, particularly where the calculation divides by one of the figures you supplied. That is worth understanding before you rely on a figure.
For anything that will be committed to, write the inputs down beside the result. A number you can reproduce is worth far more than one you cannot explain.
A Worked Example
Working through an example, with operating costs set to 10, base rent set to 5, lease term set to 2, the calculator returns monthly rent of 500, and tenant cash allowance of 500, and operating costs % of 0.02. Substitute your own figures and the same steps produce the same kind of answer.
Frequently Asked Questions
What do I need to work out net effective rate (monthly)?
Enter operating costs, base rent, lease term, property area, no. of rent-free months and tenant cash allowance. The calculator then works through the relationship and reports net effective rate (monthly), net effective rate (annual) and tenant cash allowance.
What does the net effective rent actually calculate?
It takes operating costs, base rent, lease term, property area, no. of rent-free months and tenant cash allowance and converts them into net effective rate (monthly), net effective rate (annual) and tenant cash allowance using the standard relationship for this problem. Each step is applied in turn, so every output is traceable back to the numbers you typed in.
How should I enter operating costs?
Use the value you actually have, in the unit shown next to the field. Enter every value in the same unit system. The calculator assumes the figures you supply are consistent, so it cannot correct a mistake that happens before the calculation starts.
Does anything you type get stored?
No. The whole calculation runs inside your browser, and nothing you enter is uploaded, logged or sent anywhere.
Do I have to fill in every field?
Only the fields a particular result depends on. If you leave one blank, the results that need it simply show a note instead of a number, and everything else still works.