Effective Rent Growth Calculator

Headline rent growth hides concessions and renewal discounts. This calculator shows effective rent growth for cash-flow purposes.

Asking rent growth %

Concession months / lease

Lease term (months)

Renewal discount %

Renewal share %

Effective rent growth

-4.43%

Concession drag

8.33%

Renewal drag

1.10%

How the math works

Effective growth = ask growth − concession drag − renewal discount × renewal share. Each subtracts from pro forma NOI.

Track effective growth monthly. Concessions compound into renewals (anchoring). A portfolio offering 'free rent' loses pricing power even after concessions stop.

How to Use

Enter asking rent growth %.
Enter concession months per year.
Enter renewal discount %.
Enter renewal share.
Read effective growth.

Frequently Asked Questions

Why lower?

Concessions and renewal discounts subtract from headline. A 5% ask growth + 1mo concession + 3% renewal discount might net to 2.5% effective. That's what hits NOI.

Typical haircut?

100-250bps in soft markets. Near zero in tight markets. Renewal share matters — 60% renewal means 60% of the portfolio lags market rent.

Build-to-rent?

Year-1 concessions are heaviest; year-2 effective growth can flip positive. Track vintage-specific effective growth to forecast stabilization.

What documentation matters here?

Written leases, move-in/move-out inspections with photographs, ledger entries showing every payment and charge, served notices with proof of service, and contemporaneous emails or texts. Courts weigh written evidence heavily; informal understandings rarely stand. Institutional operators run a monthly file audit to catch gaps before they matter. Good paper trails recover most of what's owed.