What is the term for the rent specified in the lease contract?

Contract rent refers to the specific amount of rent that is agreed upon and outlined in the lease agreement between the landlord and the tenant. This rent is legally binding for the duration of the lease term and is typically fixed, meaning that the amount stated cannot be altered unless agreed upon by both parties through a subsequent amendment or new contract.

Understanding contract rent is crucial as it forms the basis for many aspects of real estate analysis and investment. It differentiates from other types of rent such as market rent, which reflects the current rental rates for similar properties in the area, and effective rent, which takes into account concessions or incentives offered by landlords. Base rent is often used in commercial leases to refer to the standard rent before considering additional costs or escalations.

In practice, knowing the contract rent allows landlords and tenants to clearly understand their financial obligations and aids in the assessment of property valuation and investment metrics.