Rent Increase Calculator
Convert a rent rise into a percentage, a portfolio revenue figure and the value it creates at your cap rate — then test it against the turnover it might trigger.
Rent Increase Calculator
Results recalculate instantly on every keystroke. Nothing you type is transmitted.
What this result does not account for
- Turnover cost is a working estimate, not a quotation for your market.
- Value created assumes the increase flows entirely to net operating income.
- Notice periods and rent control rules are jurisdiction-specific and not modelled.
In short: A rent increase is measured against the OLD rent. Raising 1,200 to 1,284 is 7.00%, not the 6.54% you get by dividing by the new rent — and across ten units it creates 126,000 of value at an 8% cap.
Formula
increase % = (new − old) ÷ old × 100
value created = annual increase ÷ cap rate
[('old rent', 'the denominator, always'), ('lesser-of', 'min(CPI, contractual cap)'), ('annual increase', 'monthly rise × 12 × units'), ('value created', 'capitalised at the market cap rate')]
Worked Example
- Take the increase as new rent less current rent.
- Divide by the CURRENT rent — never the new one.
- Multiply by twelve and by the number of units.
- Capitalise that annual figure at your cap rate.
- Weigh it against the cost of a turnover it might cause.
Raising 1,200 to 1,284 is an increase of 84, which is 7.00% of the old rent — dividing by the new rent gives 6.54% and understates it by 0.4579 points. Across ten units the rise is 10,080 a year, worth 126,000 of value at an 8% cap. But one turnover costs about 2,600, which takes 30.95 months of the increase to repay — so the rise only pays if the tenant stays.
Strengths & Limits Of This Model
Where this engine is strong
- Prints the wrong-denominator figure so the error is visible
- Resolves CPI-with-cap clauses and says which one binds
- Weighs the increase against turnover cost in months
Where it stops
- Turnover cost is generic
- No jurisdiction rules
Practical Use Cases
Serving a rent notice
Stating the percentage correctly against the current rent.
Checking a rent cap
Testing an increase against a statutory or contractual ceiling.
Applying a CPI clause
Resolving a lesser-of formula between inflation and a cap.
Valuing a rent roll
Capitalising a portfolio-wide increase into value.
Deciding whether to push
Comparing the gain against the cost of losing the tenant.
Methodology & Editorial Standards
The increase percentage uses the current rent as the denominator, which is both the arithmetic definition and the basis on which rent caps are written; the page prints the wrong denominator alongside it so the size of that error is visible. CPI clauses resolve as the lesser of index and cap. Value created capitalises the portfolio-wide annual increase at the entered cap rate, and the turnover comparison uses one and a half months of rent plus a make-ready allowance as a working estimate.
Computation runs in IEEE-754 double precision at full internal precision; rounding to two decimal places occurs strictly at the display layer, so no cumulative drift enters the result. All monetary outputs use accounting presentation — grouped thousands, two decimals, negatives in parentheses — so figures can be transcribed directly into a model or working paper. Division-by-zero and out-of-domain inputs return an em-dash rather than a misleading number.
This engine was reconciled against an independent reference implementation and hand-verified for the worked example above before release. Our full five-stage review process is published on the About Us page.
Disclaimer. This calculator is provided for informational and modelling purposes only and does not constitute financial, tax, legal, medical, or engineering advice. Verify all figures with a qualified professional before acting on them.
Rent Increase Calculator — 10 Expert FAQs
10 analyst-written answers to the questions practitioners actually ask — optimised for voice and answer-engine retrieval.
How do you calculate a rent increase percentage?
Subtract the current rent from the new rent and divide by the CURRENT rent, not the new one. Dividing by the new rent always produces a smaller figure and is the single most common error, which matters because caps and statutes are written against the old rent.
What is a reasonable rent increase?
Reasonable is whatever the market supports without triggering a vacancy, and that test is specific to your submarket. The useful discipline is to compare the annual gain against the cost of a turnover: if a rise takes more than a year of the increase to repay one vacancy, it is probably too aggressive for a good tenant.
How much does a tenant turnover cost?
Commonly a month or two of lost rent plus make-ready and leasing costs, which together often approach one and a half to two months of rent. That is why a modest increase on a reliable tenant frequently beats a large increase that prompts them to leave.
How does a CPI-linked rent clause work?
The rent rises by the change in a published inflation index, usually subject to a floor, a cap, or both. A lesser-of clause applies whichever of CPI and the cap is smaller, so in a low-inflation year CPI binds and the cap does nothing, while in a high-inflation year the cap holds the rent below inflation and real rent erodes.
Why does a small rent rise create so much value?
Because income-producing property is valued by capitalising income. At an eight per cent cap rate every additional dollar of annual net income adds twelve and a half dollars of value, so a rise that looks trivial per unit per month is substantial once multiplied across a portfolio and capitalised.
Do increases compound?
If the clause reads 'of the then-current rent', yes, and the difference compounds meaningfully over a long tenancy. If it reads 'of the initial rent' the increases are simple and the rent falls behind. Leases are frequently ambiguous on this point, and the ambiguity is worth resolving before signing.
Can I raise the rent mid-lease?
Not unless the lease itself provides for it, through an escalation clause or an index-linked review. A fixed-term lease fixes the rent for the term; increases otherwise take effect at renewal, with whatever notice period the jurisdiction requires.
What notice is required?
It varies widely by jurisdiction and often with the size of the increase — thirty days is common for modest rises, sixty or ninety for larger ones or longer tenancies. Some places also prescribe the form of the notice, and a defective notice can void the increase entirely.
Does the increase apply to the deposit too?
Only where the lease or local law allows the deposit to be topped up, and several jurisdictions prohibit it during a tenancy. Where it is permitted the deposit cap is still expressed in months of rent, so it moves with the rent automatically rather than needing a separate calculation.
Should I raise rent to market immediately?
Rarely in one step. A large jump maximises the chance of a turnover, and this page shows the turnover cost in months of the increase precisely so the two can be compared. Closing a gap over two or three renewals usually captures more of it than a single move that empties the unit.