A tool designed to determine the ratio of a rental price change relative to the original rental cost, expressed as a percentage. For example, if a monthly rent increases from $1,000 to $1,050, the percentage increase is calculated as (($1,050 – $1,000) / $1,000) * 100, resulting in a 5% increase.
This calculation is vital for both landlords and tenants to understand the magnitude of rent adjustments. Landlords use it to assess the financial impact of raising rents and to compare their increases with market trends. Tenants use it to evaluate the affordability of their housing and to negotiate potential increases. Historically, understanding these calculations has been essential in maintaining fair and transparent rental agreements.