RENT OWN SELL
Newyork
RENT OWN SELL
Newyork
Many factors go into selecting your perfect home. For some, the major concern might be location while for others it could be proximity to amenities like shopping and parks. But one factor is almost always at the top of the list: price.
Imagine finding your dream apartment only to find out its way out of your price range. A real bummer, right? But what if there was a way you could get a net effective rent on the 12-month lease on your dream house?
Net-effective rent amounts to the rent tenants pay after rent incentives are deducted. It is one of the most explored and attractive rental options for NYC tenants. The offer is more commonplace in the off-season.
Rent in NYC is expensive. Net effective rent provides an excellent opportunity to offset rent. For example, let’s consider an apartment that’s listed for $3,000/month for 12 months. The tenant would see a savings of $3,000 (from $36,000/year to $33,000/year) when net-effective rent is in effect.
Gross rent is the traditional rental rate and it includes property incentives. Some landlords request gross rent be noted on the apartment listing.
Net effective rent, on the other hand, is the total rent a tenant has to pay to the landlord minus any incentives. For example, if there is one month of free rent included in the lease above, the total monthly rent would be $10,000.
Net-effective rent won’t appear on every apartment listing because landlords don’t offer it all the time. Instead, it is usually only offered when the landlord is not able to find a tenant or they are trying to fill vacant units during the off-peak renting season. Offering net-effective rent helps in these circumstances as it helps increase demand for landlords and gives tenants a break as it gives them a chance to reduce their rent.
To calculate net effective rent, simply multiply the monthly rent with the total number of months included in the lease. Then subtract the total amount of incentives offered.
Net effective rent is usually applied to the first year of the lease, so it’s important to have some idea of the value of incentives as this will likely be added back into the monthly rent payment should you decide to renew.
Always read your lease carefully, especially the small print. You need to understand every clause so you know your legal obligations.
Whether your lease includes net effective rent should be included in your lease as well as any incentives, their values, and how long net-effective rent will be in effect. Solicit the help of a real estate attorney if necessary so that you are crystal clear about the terms of your lease so you’re not caught off guard.
Net effective rent has proven to be a win-win incentive for landlords and tenants alike. They’re not always an option, but when they are, being familiar with how this type of rent works will give you the upper hand when apartment hunting.
