1. What is Net Effective Rent?

Net Effective Rent (NER) is the actual average monthly rent paid after accounting for any free months or other concessions in the lease. It helps compare lease offers with different terms and incentives.

2. How Does the Calculator Work?

The calculator uses the Omni NER equation:

Where:

• \( Sum\ Payments \) — Total payments over the lease term (USD)
• \( Free\ Months \) — Number of months with free rent
• \( Rent \) — Monthly rent amount (USD)
• \( Term \) — Total lease term in months

Explanation: The equation calculates the average monthly rent after subtracting the value of free months from the total lease payments.

3. Importance of Net Effective Rent

Details: NER helps tenants compare different lease offers objectively and landlords evaluate the true cost of concessions. It's particularly useful when comparing leases with different free month incentives.

4. Using the Calculator

Tips: Enter the total sum of payments in USD, number of free months, monthly rent in USD, and lease term in months. All values must be positive numbers with term ≥1 month.

5. Frequently Asked Questions (FAQ)

Q1: How is Net Effective Rent different from gross rent?
A: Gross rent is the stated monthly amount, while NER accounts for concessions like free months to show the actual average monthly cost.

Q2: Should I always choose the lease with lowest NER?
A: While NER is important, also consider lease length, flexibility, and other terms that might affect your needs.

Q3: How do free months affect the calculation?
A: Each free month reduces the total lease cost by one month's rent, which is then averaged over the full term.

Q4: Does this work for commercial leases?
A: Yes, the same calculation applies to both residential and commercial leases with free rent periods.

Q5: What if there are other concessions besides free months?
A: Other concessions (like moving allowances) should be converted to their dollar value and subtracted from the total payments.