Maximum Fair Rent Calculator

Formula

The formula to calculate the Maximum Fair Rent (R_{max}) is:

\[ R_{max} = (R_{current} \times (1 + i)) + \left(\frac{C_{improvements}}{N}\right) \]

Where:

$ R_{max} $ is the maximum fair rent
$ R_{current} $ is the current rent
$ i $ is the inflation rate
$ C_{improvements} $ is the cost of improvements
$ N $ is the number of years

Definitions

Maximum Fair Rent: The highest amount of rent that can be charged for a rental property, taking into account factors such as current rent, inflation rate, cost of improvements, and the number of years over which the improvements are amortized.

Example

Let's say the current rent (R_{current}) is $1000, the inflation rate (i) is 0.03, the cost of improvements (C_{improvements}) is $5000, and the number of years (N) is 10. Using the formula:

\[ R_{max} = (1000 \times (1 + 0.03)) + \left(\frac{5000}{10}\right) \]

We get:

\[ R_{max} = (1000 \times 1.03) + 500 = 1030 + 500 = 1530 \, \text{dollars} \]

So, the maximum fair rent is $1530.