Two numbers, one of which is marketing
Headline rent is the figure on the sign. It exists so buildings can be compared against each other in a search filter.
Net effective rent is what you actually average per month across the lease once the concession is applied. It is the only number that lets a 12-month offer and a 15-month offer compete honestly, and it belongs next to what an apartment actually costs.
The formula
Daily rate = (monthly rent × 12) ÷ 365
Then:
- Daily rate × days in the lease = gross lease cost
- Daily rate × free days = concession value
- (Gross − concession) ÷ lease months = effective monthly rent
That is it. Four operations, and it survives any term length and any concession shape.
Worked example
A $1,250 unit on a 12-month lease with one month free:
- Daily rate: (1,250 × 12) ÷ 365 = $41.10
- Lease days: 12 × (365 ÷ 12) = 365
- Gross lease cost: 41.10 × 365 = $15,000
- Free days at one month: ~30.4
- Concession value: 41.10 × 30.4 = $1,249
- Net lease cost: 15,000 − 1,249 = $13,751
- Effective monthly: 13,751 ÷ 12 = $1,146
The sign said $1,250. You average $1,146. That is a real $104 a month, and it is the number to carry into a comparison.
Why monthly math breaks
Because concessions in Dallas are quoted in weeks and days far more often than in whole months.
| Quoted as | Actual days | What people assume |
|---|---|---|
| Six weeks free | 42 | “A month and a half” (~45.6) |
| Four weeks free | 28 | “One month” (~30.4) |
| Free February | 28 | “One month” |
| Free July | 31 | “One month” |
| Eight weeks free | 56 | “Two months” (~60.8) |
Every row on the right overstates the concession. Six weeks treated as a month and a half overstates it by 3.6 days of rent — about $148 at the daily rate above.
The rule
Convert the concession to a day count first. Then price the days. Never convert a week-based offer into months.
What effective rent still does not include
Effective rent is the rent side only. Two things sit outside it:
The fee stack. Amenity, parking, package, valet trash, pest control, pet rent, RUBS, and bulk internet are recurring and are not touched by any concession. Add them after you have the effective rent, not before.
The clawback. If breaking the lease early makes the free rent repayable, the effective rent you calculated is conditional on staying the full term. Read the addendum.
Where to use it
Any time you have two offers. Different terms, different concessions, different buildings — convert both and the comparison becomes a subtraction rather than an argument.
For the most common version of that comparison, see which concession wins.
We run this on every property we send, and each figure carries the date it was verified.