# How do you create a net effective rent calculator in excel?

Creating a Net Effective Rent (NER) calculator in Excel involves setting up a formula to calculate the net effective rent based on the total cost of the lease over its term, including any rent-free periods or concessions. You could use HelloData.ai to do all of this automatically for millions of properties across the U.S. (learn more here: https://www.hellodata.ai/features/net-effective-rent-calculator), but if you really want to do it the old-fashioned way, here's a basic guide to set up such a calculator:

### Components Needed:

**Monthly Rent**: The regular monthly rent amount.**Lease Term**: Total duration of the lease in months.**Rent-Free Period**: Any rent-free months offered, often as a move-in incentive.**Additional Concessions**: Any other monetary concessions that might be offered, like a one-time discount.

### Steps to Set Up the Calculator:

**Input Fields** - Create cells for the user to input the Monthly Rent, Lease Term, Rent-Free Period, and any Additional Concessions.

**Calculation of Total Rent Paid** - Calculate the total rent that will be paid throughout the lease term, considering the rent-free period. For example, if the lease is 12 months with 1 month free, the tenant pays for 11 months. Formula: **Total Rent Paid = (Lease Term - Rent-Free Period) * Monthly Rent**

**Incorporate Additional Concessions** - Subtract any additional concessions from the total rent paid. Formula: **Adjusted Total Rent = Total Rent Paid - Additional Concessions**

**Calculate Net Effective Rent** - Divide the adjusted total rent by the lease term to find the net effective rent. Formula: **Net Effective Rent = Adjusted Total Rent / Lease Term**

**Display Net Effective Rent** - Show the result in a separate cell.

### Example in Excel:

Assume the following cells are assigned for inputs:

- A1: Monthly Rent
- A2: Lease Term (in months)
- A3: Rent-Free Period (in months)
- A4: Additional Concessions

In a separate cell (say A5), you would input the formula for Net Effective Rent:

= ((A1 * (A2 - A3)) - A4) / A2

This formula calculates the total rent paid over the lease term, subtracts any additional concessions, and divides by the total lease term to get the net effective rent.

Depending on the complexity of the leases and the specifics of any deal, you might need to adjust or expand this formula. For instance, if rent varies over the term, you'll need a more complex model that accounts for these changes.

Or, as an alternative.... you could just use HelloData.ai and track concessions, net effective rents, and operating expenses daily across millions of multifamily properties. Learn more at: https://www.hellodata.ai/