Work out lease rent free period value instantly with clear inputs, formula shown and shareable results.
A rent free period is a discount disguised as a timing concession. Its nominal value is simply the waived rent, but because it falls at the start of the lease its present value is close to nominal. Spreading the payable rent over the full term gives the effective rent, which is what should be compared between competing offers.
Concession value
Nominal = monthly rent x rent free months; present value discounts each waived month
Effective rent
Effective = face rent x (term - free months) / term
Nominal = monthly rent x rent free months; present value discounts each waived month. A rent free period is a discount disguised as a timing concession.
Because the headline rent sets the valuation. A property capitalised on face rent is worth more than one on a lower passing rent, even if the cash received is identical.
This calculator takes 4 inputs: Face monthly rent, Rent free months, Lease term, Annual discount rate. The pre-filled defaults are a realistic worked example — replace them with your own site or project figures.