Free tool · no sign-up
Unit mix calculator: average rent, rent upside and annual rent
Enter each unit type's count, average size, in-place rent and market rent to get the weighted averages buyers look for first: average unit size, average rent, rent per square foot, total annual rent, rent upside and loss to lease, plus price per unit and GRM if you add a price. Rents are monthly; works in Canadian or US dollars, and nothing leaves your browser.
Results
- Total units
- 48
- Average in-place rent
- $1,791.67 / mo
- Average market rent
- $2,131.25 / mo
- Average unit size
- 705.83 sq ft
- Rent per sq ft
- $2.54 / mo
- Annual in-place rent
- $1,032,000
- Annual market rent
- $1,227,600
- Rent upside
- 18.95%
- Loss to lease (per year)
- $195,600
- Price per unit
- $300,000
- Price per sq ft
- $425
- GRM (in-place)
- 13.95x
| Type | % units | Annual in-place | Upside |
|---|---|---|---|
| Bachelor | 12.5% | $97,200 | 18.5% |
| 1 bedroom | 50.0% | $475,200 | 18.2% |
| 2 bedroom | 29.2% | $344,400 | 19.5% |
| 3 bedroom | 8.3% | $115,200 | 20.8% |
Works in Canadian or US dollars: enter every amount in the same currency. Calculated in your browser; nothing is sent or saved.
How it’s calculated
- Weighted average
Average rent = Σ (units × rent) ÷ total units (the same for size and market rent) - Annual in-place rent
Annual rent = Σ (units × monthly in-place rent) × 12 - Rent upside
Upside = average market rent ÷ average in-place rent − 1 - Loss to lease
Loss to lease = annual market rent − annual in-place rent - Rent per sq ft
Rent / sq ft = average rent ÷ average unit size (monthly) - GRM
GRM = price ÷ annual in-place rent
Worked example (illustrative numbers)
- A fictitious 48-unit apartment building: 6 bachelors (450 sq ft, $1,350 a month in place, $1,600 market), 24 one-bedrooms (620 sq ft, $1,650 / $1,950), 14 two-bedrooms (850 sq ft, $2,050 / $2,450) and 4 three-bedrooms (1,100 sq ft, $2,400 / $2,900).
- Weighted by unit count, the average unit is 705.83 sq ft (33,880 sq ft in all), the average in-place rent is $1,791.67 a month and the average market rent is $2,131.25, or $2.54 per sq ft per month in place.
- Annual in-place rent is $1,032,000 and annual market rent is $1,227,600: a rent upside of 18.95% and a loss to lease of $195,600 a year. One-bedrooms are 50.00% of the units and 46.05% of the in-place rent.
- At an asking price of $14,400,000, that is $300,000 per unit and a GRM of 13.95x on in-place rent.
Illustrative figures for a fictitious building; they are not market rents, prices or multipliers for any city or property type.
Why the unit mix matters to a buyer
For an apartment building, the unit mix is the first table a buyer reads after the price. It shows what is being bought (how many bachelors, one-, two- and three-bedroom units, and how big they are) and where the income comes from. A building heavy in small units usually has more turnover and a higher rent per square foot; a building with more family-size units often has longer tenancies and steadier occupancy. Neither is better on its own, but the buyer will price them differently.
The unit mix is also where the value-add story starts. If in-place rents sit well below what comparable units rent for today, the gap is the upside a new owner can capture as units turn over or after renovations, subject to the rent rules that apply to the building.
Weight the averages by unit count
A simple average of the rent column treats the four three-bedroom units the same as the twenty-four one-bedrooms. Weighting by unit count makes each type count in proportion to how many doors it has, which is the figure that multiplies back to the building's actual rent. In the example, the simple average of the four in-place rents is $1,862.50; the weighted average is $1,791.67.
Calculate an average only when every unit type has the figure. If one row has no market rent, an average built from the other rows describes part of the building, not the whole; leave the average blank and show the rents by type instead. This calculator follows that rule and shows a dash rather than a partial average.
Rent upside and loss to lease, honestly
Rent upside compares the average market rent with the average in-place rent; loss to lease is the same gap in dollars per year. Both are only as good as the market rents behind them, so say where the market rents come from (recent leases in the building, comparable buildings, or an appraisal) and the date. Buyers will discount an unsupported market-rent column.
In rent-controlled or rent-regulated units, the upside may be reachable only at turnover, after permitted increases or not at all. Where rules like these apply, say which units they cover and do not present the full gap as income a buyer can count on. Arithmetic only: this is not an appraisal, a valuation opinion, or financial, legal or tax advice.
Showing the unit mix in an offering memorandum
OfferingStack's offering memorandum has a Unit Mix page built from the unit types you enter: a table of units, average size, in-place and market rent for each type, with headline tiles that are calculated and labelled as calculated (total units, average unit size and average rents weighted by unit count, total in-place rent, rent upside and rent per square foot). A tile appears only when every unit type has the figure it needs. Under the table, a chart shows the rent upside by type when both rents are entered, otherwise the rent by type, otherwise the number of units by type. If you state a rent-regulation status for a unit type, it gets its own column.
When every residential unit type has a unit count and an in-place rent and no gross income has been typed, the investment summary adds the annual in-place rent and, where it applies, a GRM on the asking price, both marked as calculated.
Questions
How do you calculate the average rent of an apartment building?
Multiply each unit type's rent by its number of units, add the results and divide by the total number of units. In the example, $86,000 of monthly in-place rent across 48 units is an average of $1,791.67 a month.
What is loss to lease?
The difference between what the units would rent for at today's market rents and what they rent for now, usually stated per year. In the example, $1,227,600 at market minus $1,032,000 in place is a loss to lease of $195,600 a year.
Should rent per square foot be monthly or annual?
For apartments, monthly rent per square foot is the usual figure; commercial space is usually quoted per square foot per year. Multiply the monthly figure by 12 to compare with an annual one, and always say which you are using.
How is GRM calculated from a unit mix?
Divide the price by the annual in-place rent: units × monthly rent × 12, summed over the unit types. $14,400,000 ÷ $1,032,000 = 13.95x in the example. The GRM calculator linked below covers other income and vacancy too.
Is my data saved?
No. The calculation runs in your browser and nothing you type is sent to OfferingStack.
Related
Put the numbers in a finished offering memorandum.
Upload your fact sheet or rent roll, add the NOI and price, and review a watermarked preview of the financial and pricing pages before you buy anything.