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Net Effective Rent Calculator

Calculate the true monthly rent after concessions. See how free months and discounts impact your effective rental income over the lease term.

Calculate Net Effective Rent

The listed or face rent on the lease

$

Dollar amount of monthly concession (e.g. one month free = full rent amount)

$

Number of months the concession applies

Total length of the lease agreement

Result

Enter gross rent and concession details to calculate NER

How Net Effective Rent Is Calculated

NER = (Gross Rent x Lease Term - Total Concessions) / Lease Term

Gross Rent

The face or advertised monthly rent amount on the lease agreement. This is what the tenant would pay without any concessions.

Total Concessions

The total dollar value of concessions offered. Common concessions include free months, reduced rent periods, move-in specials, and waived fees. Calculated as Concession Value x Concession Months.

Why Net Effective Rent Matters for Multifamily

True Revenue Visibility

Face rent can be misleading when concessions are in play. NER shows the actual income per unit, enabling accurate revenue forecasting and budgeting.

Concession Strategy

Compare the cost of different concession packages side by side. Is two months free on a 12-month lease better than $200 off for six months? NER answers this.

Valuation Impact

NER directly feeds into effective gross income, NOI, and ultimately property valuation. Tracking NER trends helps asset managers protect and grow asset value.

This calculator shows one property.
Cai shows your entire portfolio.

BubbleGum BI tracks net effective rent across every unit in your portfolio — with concession trend analysis, renewal forecasting, and AI-driven pricing recommendations.

Schedule a Demo

Want to go deeper? Read our comprehensive net effective rent guide for comp analysis methodology, renewal decision economics, and how NER affects property valuation.

Frequently Asked Questions

What is net effective rent?
Net effective rent (NER) is the actual average monthly rent a landlord receives over the full lease term after accounting for concessions like free months, reduced rent periods, or move-in specials. It provides a more accurate picture of rental income than the gross or face rent.
How do you calculate net effective rent?
NER = (Gross Monthly Rent x Lease Term - Total Concessions) / Lease Term. For example, if gross rent is $2,000/month on a 12-month lease with one month free ($2,000 concession), the NER is ($2,000 x 12 - $2,000) / 12 = $1,833.33/month.
Why does net effective rent matter for multifamily?
NER reveals the true cost of concessions on your revenue. Two properties may advertise the same face rent, but different concession strategies produce very different effective incomes. Tracking NER across your portfolio helps identify which properties are giving away too much to fill units.
What is the difference between gross rent and net effective rent?
Gross rent (or face rent) is the listed monthly rent amount on the lease. Net effective rent accounts for any concessions or discounts spread across the lease term. In competitive markets with heavy concessions, NER can be significantly lower than gross rent.
How do concessions affect property valuation?
Concessions reduce effective income, which lowers NOI, which in turn reduces property valuation under the income capitalization approach. A $100/month NER reduction across 200 units represents $240,000 in annual income loss, which at a 5% cap rate translates to $4.8 million in reduced property value.