Net Effective Rent Calculator
Enter the gross rent, the lease length and the free time on offer to see the net effective rent, what you pay over the whole lease and what the concession is worth.
By Tess Mullins · Updated
Your lease
Net effective rent
$3,300 a month
The average over the lease: $300 (8.3%) less than the gross rent.
- You pay $3,600 in the months that aren't free, $39,600 over the 12-month lease.
- The free rent is worth $3,600.
- Budget for the gross rent each month: renewals and future increases are typically based on it, not on the net effective rent.
Check how the free time is applied in your lease. How we calculate
General information, not legal or financial advice.
The short answer
Net effective rent is the average monthly rent over the lease once the free time is counted. Take the rent you’ll actually pay over the whole lease and divide it by the number of months. With $3,600 gross rent and one month free on a 12-month lease, you pay $39,600 in total, so the net effective rent is $3,300.
The catch: you still pay the full $3,600 in every month that isn’t free. Budget for the gross rent, and use the net effective rent to compare offers.
How to use the calculator
- Enter the gross monthly rent, the rent written on the lease.
- Enter the lease length in months.
- Enter the free time and pick weeks or months, the way the offer is written.
The result shows the net effective rent, what you pay over the lease and what the free time is worth. Use Copy link to compare two offers side by side.
Net effective rent for common concessions
At $3,000 a month on a 12-month lease:
| Free rent | Net effective rent | Saved over the lease |
|---|---|---|
| 4 weeks | $2,769.23 | $2,769.23 |
| 6 weeks | $2,653.85 | $4,153.85 |
| 8 weeks | $2,538.46 | $5,538.46 |
| 12 weeks | $2,307.69 | $8,307.69 |
| 1 month | $2,750 | $3,000 |
| 2 months | $2,500 | $6,000 |
How we calculate
- Free time in months: months as entered. Weeks are converted at 12 ÷ 52 of a month each, the monthly rent’s weekly equivalent. That’s our method.
- What you pay = gross rent × lease months − the value of the free time.
- Net effective rent = what you pay ÷ lease months.
Some calculators count 4 weeks as a month instead. Brick Underground’s, for example, enters six weeks free as a month and a half. That counts the free time as slightly longer: 6 weeks free at $3,000 comes to $2,653.85 our way and $2,625 their way. If an offer states the dollar value of the free time, use that.
Worked examples
Example: One month free on a 12-month lease
What we know
- Gross rent: $3,600 a month
- Lease: 12 months
- Free rent: 1 month
How it works out
- Free rent is worth: 1 month × $3,600 = $3,600.
- You pay: $3,600 × 12 − $3,600 = $39,600.
- Net effective rent: $39,600 ÷ 12 months = $3,300.
$3,300 a month net effective, $300 less than the gross rent.
Example: Six weeks free
What we know
- Gross rent: $3,000 a month
- Lease: 12 months
- Free rent: 6 weeks
How it works out
- Free rent is worth: 6 weeks × $3,000 × 12 ÷ 52 = $4,153.85.
- You pay: $3,000 × 12 − $4,153.85 = $31,846.15.
- Net effective rent: $31,846.15 ÷ 12 months = $2,653.85.
$2,653.85 a month net effective, $346.15 less than the gross rent.
Example: Two months free on an 18-month lease
What we know
- Gross rent: $3,200 a month
- Lease: 18 months
- Free rent: 2 months
How it works out
- Free rent is worth: 2 months × $3,200 = $6,400.
- You pay: $3,200 × 18 − $6,400 = $51,200.
- Net effective rent: $51,200 ÷ 18 months = $2,844.44.
$2,844.44 a month net effective, $355.56 less than the gross rent.
Gross vs net effective rent: what to watch
- Your monthly payment is the gross rent. The free time lowers what you pay over the lease, not each month’s bill.
- Renewals start from the gross rent, typically. That’s the rent written on the lease. In California, the state’s rent cap is measured from the gross rent, and Civil Code 1947.12 says concessions are left out when working out the base.
- No general legal definition. New York lawmakers have proposed a definition of net effective rent (Assembly bill A2390), but it isn’t law.
- When the free time falls depends on the lease. The net effective rent comes out the same either way, but your cash flow doesn’t.
Ask for the gross rent, the free time and when it applies in the lease itself, not just in the listing, and keep a copy with your records.
This is general information, not legal or financial advice.
Frequently asked questions
What is net effective rent?
It's the average monthly rent over the lease once the free time is counted. With $3,600 gross rent and one month free on a 12-month lease, the net effective rent is $3,300. You still pay $3,600 in every month that isn't free.
What's the difference between gross and net effective rent?
Gross rent is the rent on the lease, what you pay in a normal month. Net effective rent spreads the free time over the whole lease, so it's lower. Listings may quote either one, so check which you're looking at.
How do I calculate 6 weeks free rent?
Count 6 weeks as 1.38 months (6 × 12 ÷ 52). With $3,000 gross rent on a 12-month lease, the net effective rent is $2,653.85. Some calculators count 4 weeks as a month, which turns 6 weeks into 1.5 months and gives $2,625.
How much is 8 weeks free rent worth?
On a 12-month lease at $3,000 a month, eight free weeks are worth $5,538.46, and the net effective rent is $2,538.46. Enter your own rent and lease above.
Is my renewal based on the gross or the net effective rent?
Typically on the gross rent, the rent written on the lease. In California, the state's rent cap is measured from the gross rent, with concessions left out, under Civil Code 1947.12. Check your renewal offer and your lease.
Is net effective rent defined by law?
Not in general. New York lawmakers have proposed a definition for rent-stabilized apartments (Assembly bill A2390), but it hasn't become law. Ask for the gross rent and the concession terms in writing.
When does the free time apply?
Your lease decides. The net effective rent is the same either way, but your monthly payments aren't, so check when the free time falls before you budget.
Next step
Prorated Rent CalculatorEnter your rent and move date to see what you owe for a partial month, worked out the three common ways leases prorate rent.
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