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Renting / Net effective rent

Net effective rent calculator

Many New York listings advertise a "net effective" rent: the free months spread over the whole lease. Your lease, your security deposit, the income you need and any renewal are based on the higher gross rent. Convert either way and see what you'll really pay.

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Since June 2025, New York City's FARE Act means the party who hires a broker pays them; you usually pay a fee only if you hired the broker yourself. NYC DCWP: FARE Act · checked 21 Oct 2026

An example to start with: change the numbers to match your listing.

$4,000 net effective with 1 month free on a 12-month lease means a gross rent of $4,364 a month.

Gross rent, a month$4,364The rent in the lease; what you pay in every month that isn't free
Net effective rent, a month$4,000The gross rent with the free months spread over the lease
Cash to move in$8,727First month $4,364, security deposit $4,364 (one month's gross rent) and broker's fee $0. Assumes the first month isn't free; ask which months are free.
All-in, a month$4,000Net effective rent, fees and utilities, with the broker's fee spread over the lease
Total over the lease$48,000Rent $48,000 for 11 months you pay, plus fees, utilities and the broker's fee. The deposit comes back, so it isn't counted.

What's based on the gross rent

  • Security deposit. In New York State a deposit can't be more than one month's rent, and that's the rent in the lease: $4,364 here, not the net effective figure. NY General Obligations Law §7-108(1-a) · checked 21 Oct 2026
  • Income needed. Landlords in New York commonly ask for yearly income of 40 times the monthly rent, worked out on the gross rent: $174,545 a year.
  • Renewal. A renewal offer is priced from the rent in your lease, and it may not include free months. Renewing at the same gross rent with nothing free, you'd pay $4,364 a month, $364 more than the net effective rent, before any increase.

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