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Effective rent is a way to spread the economic value of a concession across the full lease term so two apartment offers can be compared consistently. For example, a $2,000 apartment with one month free on a 12-month lease has $22,000 of scheduled rent after the concession, or about $1,833.33 per month on an effective basis. The renter may not literally pay that amount every month because billing methods vary. Grant uses effective rent primarily as a comparison tool, while base rent remains important for qualification and lease obligations.
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- How Do Apartment Free-Rent Specials and Effective Rent Work? · Editorial source guide
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