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Rent Increase Calculator

Created by Wei Bin Loo
Reviewed by Steven Wooding
Last updated: Jan 18, 2024


With this annual rent increase calculator, we aim to help you compute the expected future rent for you.

We have written this article to help you understand what a rent increase is and how to calculate a rent increase. We will also demonstrate some examples to help you understand the rent increase percentage calculation.

Please check out our rental property calculator to understand more about this topic.

What is rent increase?

Rent increase is a term used to describe a situation where the landlord of a rental property raises the amount of rent they charge the tenant. Rent increases can occur for a variety of reasons, such as inflation, changes in the local real estate market, or improvements made to the property. Whatever the reason, rent increases can significantly impact both landlords and tenants, so it's important to understand how they work.

How to calculate my rent increase?

Now that you have understood what a rent increase is, let's talk about the rent increase percentage calculation. To understand the annual rent increase calculation, let's take the following apartment as an example:

  • Current annual rent: $24,000
  • Average rent increase per year: 5%
  • Number of years to estimate: 10 years

You can calculate your future rent in four steps:

  1. Determine your current annual rent.

    The first step is to determine your current annual rent. This is the amount of rent that you are currently paying in a year.

    For our example, the current annual rent is $24,000.

  2. Compute the average rent change per year.

    Next, you need to compute the average rent change per year. This is the average rate your annual rent will increase or decrease every year. The average rent increase for our example is 5%. Our percentage increase calculator can help you with your calculation.

  3. Determine the number of years you want to estimate.

    The next step is to determine the number of years forward you would like to estimate. This example is looking 10 years forward.

  4. Apply the future rent formula:

    The last step is to calculate the expected future rent using the formula below:

    future annual rent = current annual rent × (1 + average rent change) ^ number of years

    future annual rent = 24000 × (1 + 0.05)^10

    future annual rent = $39,093

Significance of rent increase

A rent increase can have significant impacts on both landlords and tenants. For landlords, it can increase their income and cover any additional expenses related to the property, such as repairs or upgrades. Additionally, rent increases can help landlords keep pace with inflation and the rising costs of living.

For tenants, rent increases can be a source of financial strain, particularly if they occur frequently or are substantial. If a tenant's income doesn't increase in line with their rent, they may have to cut back on other expenses or even move to a more affordable location. Rent increases can also make it difficult for tenants to plan their finances, as they may not know how much they'll be paying for housing from one year to the next. To understand more on this topic, check out our rent or buy calculator.

FAQ

How can I calculate my expected future rent?

You can calculate your future rent in four steps:

  1. Determine your current rent.

  2. Compute the average rent change per year as a percentage and divide by 100.

  3. Determine the number of years you want to estimate.

  4. Apply the future rent formula:

    future rent = current rent × (1 + average rent change) ^ number of years

What is my rent in 10 years if my current annual rent of $20,000 increases 5% per year?

Your expected future rent will be $32,577.89. You can calculate this by using the future salary formula:

future annual rent = current annual rent × (1 + average rent change) ^ number of years.

Can a tenant negotiate a rent increase?

Yes, tenants can attempt to negotiate a rent increase with their landlord. However, its success will depend on the landlord's willingness to negotiate and the local rental market conditions.

Can a landlord raise the rent during a lease term?

Generally, a landlord cannot raise the rent during a fixed-term lease unless the lease agreement allows for it or the tenant agrees to the increase.

Wei Bin Loo
Related calculators
Current annual rent
$
Average rent change per year
%
Number of years
yrs
Expected future annual rent
$
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