Transparent method
The formula
Worked example
Example inputs
How to interpret the result
A rent increase's headline percentage and its effective rent, once any concession or free-rent period is factored in, can tell two different stories about a lease's real revenue change, since a landlord offering a period of free rent alongside a stated increase is trading some of that increase away in practice.
Before you rely on it
What to check
Calculate effective rent after any concessions before comparing an increase's real revenue impact against its stated headline percentage.
The common error
Where people go wrong with rent increase calculator
Comparing a headline rent increase percentage without checking for concessions that offset it. A stated increase paired with a period of free rent produces a smaller real revenue change than the headline percentage alone suggests.
Sensitivity evidence
How current monthly rent changes the new monthly rent
| Current monthly rent | New monthly rent | Annual gross rent increase | Annual effective rent after vacancy |
|---|---|---|---|
| $1,600 | $1,680 | $9,600 | $191,520 |
| $1,800 | $1,890 | $10,800 | $215,460 |
| $2,000worked example | $2,100 | $12,000 | $239,400 |
| $2,200 | $2,310 | $13,200 | $263,340 |
| $2,400 | $2,520 | $14,400 | $287,280 |
Every input, tested
Which input moves the new monthly rent most
| Input | Tested from | To | New monthly rent at each end | Swing |
|---|---|---|---|---|
| Current monthly rent | $1,800 | $2,200 | $1,890 to $2,310 | $420 (20%) |
| Proposed rent increase | 4.0% | 6.0% | $2,080 to $2,120 | $40 (1.9%) |
| Occupied units | 9 | 11 | $2,100 to $2,100 | none |
| Expected vacancy after change | 4.0% | 6.0% | $2,100 to $2,100 | none |
Two variables at once
New monthly rent by current monthly rent and proposed rent increase
| Current monthly rent \ Proposed rent increase | 3.0% | 5.0% | 7.0% |
|---|---|---|---|
| $1,600 | $1,648 | $1,680 | $1,712 |
| $1,800 | $1,854 | $1,890 | $1,926 |
| $2,000 | $2,060 | $2,100 | $2,140 |
| $2,200 | $2,266 | $2,310 | $2,354 |
| $2,400 | $2,472 | $2,520 | $2,568 |
Step by step
The worked example, input by input
| Input | Value used |
|---|---|
| Current monthly rent | $2,000 |
| Proposed rent increase | 5.0% |
| Occupied units | 10 |
| Expected vacancy after change | 5.0% |
| New monthly rent | $2,100 |
| Annual gross rent increase | $12,000 |
| Annual effective rent after vacancy | $239,400 |
Where the inputs come from
Current monthly rent is what each occupied unit pays, proposed rent increase is the percentage you plan to add, occupied units is the number of units the increase applies to, and expected vacancy after the change is the share of units you expect to lose or leave empty. Check local law first: some cities and states cap annual increases or require advance notice, often 30 to 90 days. Compare the new rent with market rents for similar units.
Using the new monthly rent in a real decision
Small, regular increases tend to keep tenants.
When the result stops applying
Rent control, just-cause eviction rules and notice periods restrict increases in many places. Market rents can fall, and an increase above market drives tenants away. The calculation ignores rising costs that may justify an increase. Tenants with long tenure and a good payment history are worth more than a slightly higher rent.
What to compare it with
See the effect of vacancy with the rental vacancy loss calculator, and the property's yield on the cap rate and NOI pages. The break-even occupancy page shows how much vacancy the building can take. Ask local landlord associations about market rents and notice rules.
People also ask
Frequently asked questions
How much can I raise the rent?
It depends on local law and the market. Some places cap annual increases, and elsewhere the limit is what tenants will accept compared with similar units.
How much notice do I need to give?
Rules vary by state and city, commonly 30 to 90 days for month-to-month tenancies, and lease terms may set the increase at renewal.
Is it worth risking a tenant over a small increase?
Often not. Turnover costs, including vacancy, cleaning and marketing, can outweigh a small gain, so weigh how likely the tenant is to leave.