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What is a Loss-to-Lease Analysis?

Loss-to-Lease Analysis Loss-to-lease analysis measures the difference between market rent and actual rent being collected from tenants, identifying potential income loss when properties lease below market rates and quantifying upside potential through rent increases to market levels.

Calculation Method

  • Market rent minus actual rent collected equals loss per unit
  • Sum all units to calculate total loss-to-lease for property
  • Express as percentage showing upside potential percentage
  • Track over time monitoring rent convergence with market

Applications

  • Identifies rent increase opportunities maximizing income
  • Supports valuation analysis showing income upside potential
  • Informs leasing strategy targeting market rate rents
  • Benchmarks property performance against market standards

Loss-to-lease analysis measures difference between market and actual rent collected, identifying income loss and upside potential through rent increases to market rates.

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