Whats the point of charging "Net Effective Rent"
Hi there!
I live in NYC, our landlord and thus lease charges $2500 per month for our rent. However we only pay $2300 per month. On our lease it shows $2500 with a $200 monthly credit.... Or as they call it - our 'net effective rent'.
I understand for the purpose of when we leave that they can show the next tenant that "we were paying $2500".. But aside from this, why would a landlord do this? Are there tax benefits or something that they are trying to show they are keeping up with market rents!
I imagine that if they file their taxes showing our income was $2500 on paper, but we only paid them $2300 - they claim it as a loss? Or am i reading it totally wrong?
Most Popular Reply
@Colin M. My landlord in the city did this too. We had one month free technically. There's no tax benefit I am aware of, but instead its a way to incentivize people to move there quicker cause its better to have slightly less rent then vacancy.
But then they want the option to show that the rents were higher to the next tenant and raise it from that number. That's my guess